Hm, I've just tested the upgrade on fresh new Joomla 1.7.2 and it worked correctly, so there is probably some compatibility or configuration issue. Anyway, we've already seen a similar problem once and it should be fixed in next version of JoomSEF.
But it would be great if you could send me access credentials to your development environment's admin and FTP, so I could try to find the root of this problem.

We've found out that the problem was mainly caused by chronoforms plugin, which caused Joomla to initialize twice, so the JoomSEF plugin was also loaded twice which then lead to this issue. Anyway, such problem will be handled correctly by next version of JoomSEF.