I can't seem to find any other topics on this, so maybe I'm the only one with this issue. Every time I start up a new world in SMP everything seems to be just fine.. but when players get further from the initial spawn we keep running into significant chunk generation problems.. sheer cliffs where biomes are cut off. Half made cliffs that run into deserts.. and it's all straight lines along the chunk generation. is this happening to others? or is there somehting I can do so that my worlds generate without these errors?
Are you sure that they are "actual" chunk errors on the server, or just things not visible to the client (yet)? How much RAM do you give Java for the server? A new world may still have areas with steep vertical walls, but the biomes should blend somewhat from one to the next, not like using a newer MC version on an old map in the past.
I have noticed in 1.2.3 that some things would not fully render in the client, like trees cut in half, vines hanging from an invisible tree, etc. And if you tried to get through something like that, it would be like hitting an invisible wall. Disconnecting/reconnecting the client would clear that up. That seems improved in 1.2.4, but still happens sometimes. Part of that may be because lighting has been moved client side, so some computers (or their internet connection) may not be able to handle all that.
I forget in which earlier version I first tried running a server (1.0 or 1.1 in 64-bit Linux). I found that I hit an invisible wall an MC day walk in one direction, and likewise an MC day walk in opposite direction from spawn. An NPC village appeared to be in shambles, with foundations and walls missing, glass panes hanging in midair, water flowing out of the planted wheat. Apparently 1 GB RAM was not enough. I gave the server 2 GB and the NPC village rendered fine, no more missing walls or invisible wall. But that was just me on my home PC (which has enough cores and 8 GB RAM). Not sure how much RAM is needed for a server based on number of players, and 1.2 versions may need more than earlier versions did (I also upped my client to straight 2G instead of 512M/1024M).
So the first thing to try would be disconnect/reconnect and see if what appeared to be cut off or missing, appears normal after reconnect.
Yeah this happened to my world a few times. They changed the terrain generation code, and those parts you're seeing were the edges of your world before you updated. Once you updated it started generating terrain with the new code, which generates things differently. There isn't a way to fix it that I know of. I just made a new world in 1.2.4 and used McEdit to move my buildings over.