Multi-instance WordPress

We’re considering platforms to develop a magazine website and i find WordPress a very attractive option since the blog architecture is very similar to a magazine.

Every requirement fits very well in a WordPress installation, the only one that doesn’t is that the client want to split the website in city-specific sections (http://ny.magazine.com, http://la.magazine.com. http://box.magazine.com, etc).

The folks in #wordpress guided me to a subdomain plugin. The problem is that this plugin divide the subdomains by category and I don’t think that this sufice the requirement since each city instance will also need categories and the administration would be complicated.

Is there a way to have a single wordpress installation that shares information (like users, categories, tags) but that also have specific information for different instances (like different posts table for each city instance), if not is it possible to hack it to do so? or do you guys can recommend me another platform?