Re: Time to Upgrade to WordPress 2.8.1
Weird, I've never seen that error before.
Why are you replacing the index.php file with the one in the wp-admin folder? There is an index.php file in the root folder that should be used instead.
If that doesn't clear it up, I'd be inclined to back everything up, delete all your files (not the database) and do a fresh install.
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