It is supposed to be and I’ve been running version 1.2.1 on a multisite WP instance for about a year, but right now version 2.1.3 is not working for me and I’ve seen a few others who have reported issues. I just discovered a bug that I believe is at the root of the problem with this plugin on multi-site setups. I posted a comment about it here: http://wordpress.org/support/topic/unable-to-authenticate?replies=4
As far as I can tell, there’s no way this version or version 2.0.3 are functional in a multi-site setup so I think it’s unlikely that the developer is doing good testing for multisite. I believe version 2.0.3 was released on January 25th, so either there aren’t enough users running this plugin on a multi-site setup to raise a fuss, or the developer isn’t being very responsive to multisite issues.
That said, I know that 1.2.1 works. I would highly recommend the older version of the plugin and the new features look really cool, once the multisite bugs are fixed.