I'm a newbie to WP. Installed WP 2.7 in April 09. Fiddled around, left it.

Came back to it 17 Sep. Installed Atahualpa 3.4.1. Delighted with it. Started some serious configuration work.

Read WP advice to upgrade to WP 2.8.4. Disaster! Could no longer log in. Uninstalled everything and wiped database (many times). Have determined that WP 2.8.4 will work with other themes BUT when I activate Atahualpa 3.4.1 (or 3.4.2) I get HTTP 500 error. I am shown as logged in, cannot log in or out, cannot access admin pages. Blog shows with Atahualpa default theme.

I'd REALLY, REALLY like to use Atahualpa but I'm stuck. Help!

what version of php are you using? I've seen multiple problems with people using php 4.x - If you don't know, install wp-security scan and it will show you the version. If you are on php4, move to php5 and see how things work