In the past, if you wanted to run several websites using the regular version of WordPress, you needed to install one copy for each site (there was a special version called WordPress MU which could handle multiple sites). With WordPress 3.0, that all changed: there's now just one version and you can administer many sites from a single installation. In multisite mode, a business owner can have a company site and a personal site, families can have a blog for each family member, a group can have a site for itself and each member, schools can have a separate site for each class — the possibilities are endless.
If you're trying to manage the content of two or more sites, it's a real time-saver to have to log in only once, but even if you're just the webmaster for a group of sites, imagine having to update or backup WordPress only once.
A new service called ManageWP.com was in beta at the time of this writing and it offers an interesting take on multiple WordPress sites. It provides a single interface from which you can manage sites hosted on different accounts or servers. If you already have a lot of sites, a service like this might be easier than trying to migrate them all to a single WordPress multisite installation.
By default, WordPress is not installed with multisite mode on — it has to be activated. The process is ...