If you want to redirect all 404 errors to the homapge or any other page, You can do the following
Open up your (default template) system/error.php using your favorite editor like dreamweaver or notepad++ , then after this php code:
defined( '_JEXEC' ) or die( 'Restricted access' ); ?>
copy and paste this php code.
<?php header("Location: http://mydomain.com"); exit; ?>