This only applies to 1.0-RC7. If you are using subversion or a nightly build, this does not apply.
There is a bug in K2 1.0-RC7 which causes K2′s layout to break with WordPress 2.7.1. If you are using or planning to update to WordPress 2.7.1 (which you should if you’re using WordPress 2.7), you have two options:
Option A: Download the fixed info.php and replace the existing: k2/app/includes/info.php.
Option B: Upgrade to the latest K2 nightly.
One more thing, there will be a 1.0-RC8 release of K2 and this release will not contain the K2 Sidebar Manager. Work is being done on a K2 Sidebar Manager to Widgets importer.
2009-02-18 Update: Added clarification.