Hofmockel.org

ie. -- example.com/site and example.com/site2

This is done by creating a symbolic link at the directory location /www/html/ - 'ln -s . site'
and creating a seperate config file at /www/html/sites/example.com.site/settings.php
The directory file naming under /www/html/sites/ works like a DNS table
There is a default directory if no match is found.

ref: http://hofmonkey.org/INSTALL.txt

I have two sites running from the same Drupal4.7 instance as explained in install.txt.

These two sites have seperate databases but share users. I did this
by editing $db_prefix in the slave site's settings.php. As explained at
http://drupal.org/node/22268.

I got errors like "Duplicate entry.." when trying to create a new user. As if the sequences table was not being shared.