And it WORKS! In case anyone else is trying to install WordPress 3.x+ with subdomain network on localhost for testing, here are the steps:
1) install XAMPP. Make sure you can get to http://localhost
2) manually unpack WP files into C:\xampp\htdocs\yoursite or equivalent. Do NOT run the installer!
3) export the database from your live site and download it.
4) import that database using phpMyAdmin (http://localhost/phpmyadmin/)
You're going to need a *different* domain from your live site, so your browser can tell them apart. I called my local test site testsite.com
5) Edit these entries by changing site.com to testsite.com (or whatever you chose): WP_SiteMeta.siteurl, WP_Site.domain, WP_Options.home, WP_Options.siteurl, WP_Options.fileupload_url, WP_Blogs.domain
Then for EACH blog edit
WP_x_Options.home, WP_x_Options.siteurl, WP_x_Options.fileupload_url , where x is the number for that blog.
[Note: if you changed the prefix for security, it might not be WP_ . Also, in theory you should be able to do a replace on the whole thing, but my import failed when I tried.]
6) edit the wp_config.php file to reflect the connection to your database and the new domain you've assigned the site.
7) now we need to add a virtual host entry to our localhost server. In my version of Apache that file is here:
C:\xampp\apache\conf\extra\httpd-vhosts.conf
and I add this:
<VirtualHost *:80>
ServerName *.testsite.com
DocumentRoot "C:/xampp/htdocs/site"
DirectoryIndex index.php index.html index.htm
ServerAlias *.testsite.com
</VirtualHost>
<VirtualHost *:80>
ServerName localhost
DocumentRoot "C:/xampp/htdocs/xampp"
DirectoryIndex index.php index.html index.htm
</VirtualHost>
You'll need to restart Apache now.
8)Finally I add entries to my hosts file so my browser knows where to go when I type in something.testsite.com:
`127.0.0.1 testsite.com
127.0.0.1 user1.testsite.com'
[Note: I thought you could use *.testsite.com, but it doesn't work. This means you have to add an entry for each blog, which is sub-par. Anyone know if there's a way around that?]
On Win7 the hosts file is here: C:\Windows\System32\drivers\etc\ . Windows will try to protect you by hiding the etc directory and preventing saves to the hosts file. Right click your text editor and "run as admin" then type the address in and you'll be able to open and save hosts.
(HINT: you can redirect sites your teen is grounded from by listing their IP here with a redirect to something else. I like "mother is watching" Bonus points for a hit-counter displayed on the page. ;-) )
In theory it should all work now. Hahaha. I started this process a week ago, so there's a decent chance I've forgotten some detail, but hopefully this will help you get closer faster.