Apple released an update to the still fresh iWeb ’08. It updates iWeb to version 2.0.1. In typical terse Apple fashion they describe the update as: “These update addresses issues with upgrading and publishing iWeb 1.x websites.”
I did have a problem after I upgraded iWeb but no idea if this fixes it. I upgraded iWeb which the upgraded my Domains file (the file is specific to iWeb, it’s not a networking file). I then deleted the website but the domain file still contained the source for the website (1.5MB worth of files) even though the file was no longer listed in iWeb.