Now two people can enter the same friendly URL name but only the first person would get it. But when the second person enters the same friendly URL name he doesn't get a warning or anything. Something like "that friendly URL name is already taken" would be good

I would report that in the Bug tracker as I would consider this a bug.

I thought that was already in place. Are you sure?

Because I DO know that in Blog 1.4 when I tried to create the FURL for a directory that already existed under my name (Admin), I DID get a warning of some sort. Can't remember the exact wording, but it did prevent me from using it.

Maybe this has something to do with the bug where after you upgrade it doesn't update the Friendly URL correctly and you have to rebuild the URLs again?

Hmmm... I don't think that's related.

I did a fresh install but with Blog 1.4 RC2. No existing setup. Existing directory was result of a bad Blog creation for the account. I deleted in ACP (which does NOT delete the directory structure for that user's Blog), then tried to recreate my Blog. That's when I got the error. Once I deleted the directory, no error. And now that I have a "fresher" fresh install with Blog 1.4 Final, there was no problem.

Hmm..... maybe I should go test what the OP asked, with a couple different users.

If it doesn't give any error at all, yeah, I can see people getting very confused. And that would be a bug, too, IMO.