Don't confuse Biodiesel with straight vegetable oil (SVO). Biodiesel is refined vegetable oil with the same (or similar) characteristics as dino diesel. Vegetable oil is just vegetable oil.
Manufacturers don't allow 100% Biodiesel due to inconsistencies in refining. Too many variables due to people brewing their own, too high a concentration of Glycerol, etc. means that 5% is all most manufacturers allow. By 2010, all diesel is to be 5% Biodiesel in Europe, though most of it already is in France I believe, and quite a lot over here aswell. If Biodiesel production could be guaranteed consistently then a higher percentage could be run, even up to 100%. There's also some issues with oil contamination to consider but that's another story.
SVO on the other hand, needs a 2 tank system with inbuilt heaters etc. to work properly, as the heat makes the oil less viscous and easier for the fuel system to cope with. It's this that the PD engine has a major issue with due to the (roundabout) 29000psi injection pressures. The oil just doesn't squirt through the injectors because it's too thick, even with the heater system, and damage results. Same with commonrail diesels, but not quite such a high pressure. The older rotary pump diesels (non pd for example) will cope with the 2 tank system, and even with just SVO mixed with a small amount of thinning agent without the heater. Petrol, white spirit, kerosene etc. are the common ones.