After cracking open a brand new Catalyst ME3400G, we weren't able to get it upgraded to the latest version of software. In fact, we couldn't even ping anything on the local subnet.

In order to use Cisco's Metro Ethernet switches, it's important to understand the new concepts that are introduced. In our case, you have to understand User Network Interfaces and Network Node Interfaces. Once you understand the concept, the solution is obvious:

interface GigabitEthernet0/1
 port-type nni

Problem solved!