This was reported as RequireJS issue 177 by @DashBDev, but moving it here to track the fix:

I have a default dir specified in my build.js, but I sometimes override it on the command line.

In file:

dir: '../../build/temp'

Command line:

node r-1.0.5.js -o site\build.js  dir=../../build/temp2/

Both temp and temp2 directories are created. temp2 has all the files in an un-optimized state, temp has just a handful of files.
The optimizer errors with "No such file or directory '.../build/temp/xxx.js'"

This same config and command line works fine in 1.0.2.
I'm using node 0.6.9