I'm not sure I follow how the piece about DNS - http://www.foo.com, http://www.bar.com, and http://www.foobar.com are all CNAMEd to http://www.domain1.com and they are all ServerAlias-es on the same VirtualHost. So all the requests are getting to WordPress the exact same way and that's all separate from WordPress's ability to map a URL to a blog id and vice-versa, which the plugin handles quite nicely.
My intent was only to offer up that, with the code I referenced (which is free for one and all), the domain mapping plugin can be used to allow sites to be mapped to an even wider array of URLs - with a very minor tweak to one of the rewrite rule for the media files in .htaccess, it can even allow you to have an authoring URL like http://www.domain1.com/foobarblog/ and serve it up externally at a URL like http://www.foo.com/bar/space/filler/myblog/
I found the modded domain mapping plugin indispensible when I was administering dozens of sites in a large media & technology company. We would use it for all sort of ad-hoc sites - sometimes in a root domain, but often as a micro site in a sub-directory off a domain where the main site was served up by different servers using a different technology (and a sub-directory was reverse proxied to our WordPress cluster). We didn't always have any flexibility in the URL structure - if the CEO said he wanted his blog to be http://www.foo.com/about/ceo/, we could make it happen using the same multisite instance hosting http://www.bar.com/. There were also cases where we had two sites with seemingly conflicting names - http://www.coolproduct.com/about/ and http://www.hotproduct.com/about/, but we could handle this by making the authoring URLs something like http://www.domain1.com/aboutcool/ and http://www.domain1.com/abouthot/ and using the plugin (with mods) to map them to their correct external URLs.
Totally cool if a lot of that is outside the uses you had intended or wish to support for the plugin, but I found it extremely valuable to pushing WordPress's limits and allowing it to be used as an enterprise platform for all kinds of sites beyond blogs, and wanted to put it out there for others who might be trying to do the same.