One blog per installation. There are some interesting work-arounds but they seem kind of brittle…
You can host multiple installs/blogs if so desired: Installing_Multiple_Blogs.
Or you might have a look at WordPress mu (multi-user).
I would go the WordPress MU route, since multiple blogs with one installation would take some maneuvering of your posts by tags or categories, as well as designing a template that shows only certain tags/categories on it, and the other tags/categories on the other site(s), aka a real pain-in-the-butt.
