One of the things I love about Drupal is the taxonomy system. It's convenient and stable... except when it's not. I got 404s for the term URLs (both system and alias) and the cryptic message "Notice: Undefined index: href in menu_local_tasks() (row 1973 in path2site/includes/menu.inc).". Well, here's what worked.
The symptom started by taxonomy menu not creating any menu items... Until I realized that the items were being created in the DB just fine, just not shown. I am user 1, so permissions were certainly not an issue there.
Since I was getting 404s, I tried deleting/recreating aliases, but noticed that even the system URL ( /taxonomy/term/123 ) produced 404s.
A bit of digging around yielded the result - the culprit is the taxonomy view. Don't know why, don't know how, I just reverted it to stock and it all worked just fine, before I could trace it.
Thus, I can only imagine that something went FUBAR with my customized view (missing field handler? Some other error? ), but the thing to take from this experience -- if you get 404s on term pages, and you're using the taxonomy view, that's where to look for it!
Hope others will benefit from this, and save themselves from searching all around.