Gappiah: It's quite straightforward to do this with a symlink. You put your WP files in a master directory somewhere, and then in each wordpress subdomain, you put a symlink called 'wp' that points to this master directory. In the "config.php" of the master directory, you just put:
<?php include($_SERVER['DOCUMENT_ROOT'] . '/config.php'); ?>
Then it'll grab the custom database credentials for each individual site.
The biggest drawback is that the uploads directory must be shared among installations. This is because presently WO doesn't allow you to specify the "actual" and "apparent" upload directories separately from each other. Nor does it let you specify an absolute path... it has to be relative to the wordpress root. Both of these restrictions are silly, of course, and hopefully future versions will remove them.