I’ve been muddling my way thru learning Mu (Multiple User) WordPress now since December, and until just a few minutes ago, I never noticed that there are TWO plugin folders in Mu.
One named “plugins” which works just like a plugin folder in single user WordPress, and another folder named “mu-plugins”.
Plugins placed in the “mu-plugins” folder automatically activate across all individual blogs in the community, without any action from the individual blog owner. Reference: http://mu.wordpress.org/forums/topic.php?id=1997
Plugins placed in the regular “plugin” folder must be activiated by each individual blog owner as that person chooses.
Donncha’s domain mapping plugin (a plugin for Mu that allows each individual blog in the community to be mapped to its own domain name) must be placed in the “mu-plugin” folder in order to function.
I learned this because I inadvertently placed it in the regular “plugin” folder, busted everything, and it took me about an hour to figure out what was wrong. 
