WordPress Multisite allows multiple sites to be hosted in a single installation and share plugin and themes. It can be setup to work with sites in subdirectories or subdomains, not both.
Prior to WordPress 3.0, Multisite was a separate product and had the name WordPress MU (WPMU). Nowadays, the WPMU terminology is still used, although the actual product being referred to is a Multisite.
The biggest example of a Multisite installation is WordPress.com.
Multisite on Windows with wildcard subdomains
To create subdomains on the fly in Windows, you need a plugin.
restore_current_blog() vs switch_to_blog()
restore_current_blog()will not work anymore after the second switch.
BLOG_ID_CURRENT_SITE vs. SITE_ID_CURRENT_SITE in WordPress Multisite?
What exactly the differences are, and when either of them will not equal 1?
Plugin Development: WPMU or WP?
Difference between singlesite and multisite for developers
External articles and resources
Don't Use WordPress MultiSite
Mika Epstein, aka Ipstenu, on the alternatives a single site offers so you don't need to install a Multisite.
E-book Multisite 101
Setting up a new WordPress install is pretty easy. Setting up Multisite requires just a little more savvy, and the information is all over the place. This ebook strives to pull it all together, explain you what skills you need to get started, and move you to the next step: running your own Network. Think of it as a basic tutorial in running your own Multisite.
By Mika Epstein and Andrea Rennick.
E-book Multisite 110
This is the next step for people who've managed to get the site up and running, but want to do a little more. In this ebook, there's more philosophy and discussion, and fewer direct answers, because now you have to make decisions based on the pros and cons.
By Mika Epstein