Multiple blogs without multiple users.
Check out WP Hive - http://wordpress.org/extend/plugins/wp-hive/
Best part is that there is no wp-config.php or code-hacking required.
It is still deficient of a few features; for example, you can't yet post to another blog from a central 'administrative login' page, and it only separates blogs by domain / subdomain (not sub-directory) but these, along with a bunch of other features, are definitely on the roadmap.
Why isn't this implemented yet? I'd think far more people would benefit from a multi-blog setup for <12 users than a blogging network like MU. How many project teams, academic research teams, athletic teams etc. are there that would be ideal for this kind of thing, versus people wanting to start up the next livejournal.com, vox.com (I know those don't use WordPress, but similar idea)? This is the greatest deficiency of WordPress compared to Movable Type.
I've set up my blog to be multiuser with one blog and WordPress MU. All you do is set up all the blogs under one admin and it acts as one central blog with a unified login for all. That isn't to say that MU isn't without it's problems. Besides the antiquated interface, it also depracates the "WWW" tag stupidly and trying to turn it on is ghastly. It doesn't handle erroneous subdomain entries, e.g. error.yoursite.com will yield errors, and has its quirks. I would have thought that multiple blog handling for one user table would have been a good standard feature but that might be a third product. Fact is 95% only need just a blog with categories and that's it.
WordPress MU is currently the appropriate solution for this. However, Matt recently announced plans to merge the codebase of MU with WordPress, possibly by version 3.0 (but not guaranteed). Closing this thread as no feature like this will be built as core developers are anticipating the merge with MU functionality.
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