Hey i found I was having this issue (where the “previous entries” link on the front page would return a 404) and I tried everything people said on here to no avail.
As I re-read the comments I noticed that someone mentioned the permalinks rewrite plug-in and a light bulb went off over my head. All i had to do was add:
/page/
into the first box in this plug-in (the one titled “Paths to be skipped Separate each entry with a new line. Matched with regular expression.”) and save it.
Now my site is working correctly