The coming WordPress 3 will be a multisite solution. Within one installation of WordPress you can have multiple blogs. You can also set plugins to be sitewide, used on all blogs within the WordPress installation.

For people like me who run several WordPress blogs this is a huge step towards simpler site management. Instead of the six installataions of WordPress that I run today I can have one. And instead of maintaining plugins on each of the separate blogs I do it all in one place.

You install WordPress multisite for your core blog and then the other blogs will be set up on sub-domains. There is a plugin that makes it possible to run the “sub-blogs” on their own domains. This means that to visitors they appear as separate blogs.