Permalinks
In order for profiles to function properly, it needs to know which page you are using as the base for your profiles. Create a new page, with the desired title and a blank body using the "profiles" template. Included in the template folder are templates for both the default and kubrick themes. It should be fairly easy to adapt these to other themes. Once you have created the page, not it's "slug" location. If you created a page at /people then the slug is 'people'.
If using permalinks, then individual pages will use 'pretty permalinks' of the form //{person_slug}, otherwise, they are of the form //?people_slug={slug}.
IMPORTANT: After enabling permalinks, go to the 'Settings > Permalinks' page and click "Save" to write the permalinks to file.