Microsoft confirmed it’s a SharePoint bug and now finally have a hot fix: http://support.microsoft.com/default.aspx?scid=kb;EN-US;950292
However this hotfix requires SP1 and another post-SP hotfix. Not only that, it’s not an officially released hotfix (that’s why you have to request it in another web page), which means it not 100% tested.
There are many people frustrating about it and have some workaround. Unfortunately none of them work for me because Content Types is in our business request.
Another thing is once the Content Type is enabled, this problem will be permanent even Content Type is turned off later. Seems turning on Content Types has permanent change on the document library, even no document is created from the new content type.