Soon after upgrading to WordPress 2.7, I realized my trusted Google XML Sitemaps generator wordpress plugin was showing some write errors and was unable to generate an updated sitemap.
Since Sitemaps are crucial to let search engines index your site really well by notifying all your site urls, it needed to be fixed soon. I browsed through the support link to fix the error. They basically advised making the files writable with 755 or 777 permission, but since no changes were made to the file permissions at any time, they were still writable.
Then I checked my sitemap plugin settings
It is essential to have both form fields filled in, and it was OK, as these setting were valid for the last few years. After all attempts for support failed, I realized that maybe it was not a WP 2.7 issue at all, but maybe our hosting service Dreamhost had changed the absolute path in some way. I deleted the .funnyname (some random name) from the url and the plugin was functional again.
This is a useful tip for Dreamhost users particularly. Please check your Sitemap plugin configuration page and check to see if your plugin is working. If not, then try fixing the url as advised as Dreamhost seems to have moved a few directories on the back end and it should start working.