Great info on How to Scale Wordpress and more info on Wordpress Web Hosting. Still, I am left with questions.

Creating a project that for the sake of argument we will call a blog network. A user signs up for an account and then the blog network company creates a subdomain install for the user. For example, userdomain.blognetwork.com.

We have lots of experience with wordpress and zero experience with multisite.
1) By creating admins for each subdomain, what security concerns should we have and how to we address them?

Thank you for all the help.

EDIT: Removed sub questions for better focus

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    This combines multiple questions and is overly broad, please consider splitting this into separate more focused questions. – Rarst Jul 8 '12 at 15:38
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    You are still asking for a List Of Things. How should the one answer that solves your problem (which one?) look like? – fuxia Jul 8 '12 at 15:59

Is WordPress MultiSite secure & how much can it scale?

WordPress.com — single best example of WordPress Multisite at a large scale. Period.

As for the expertise to be able to maintain and manage the cluster — which you should question yourself — it's a different story.

By creating admins for each subdomain, what security concerns should we have and how to we address them?

I won't answer that directly. But what I can tell you is, sometimes vulnerabilities aren't noticed until some big blog/network gets hacked. You better have measures in place. Hope for the best, prepare for the worst.

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    By not answering his question directly, then telling him he "better have measures in place" is a bit like saying "I'm going to kill you if you don't know the password... but I refuse to tell you the password, so guess. Oh well, time to kill you, nice try." – AndrettiMilas Jul 8 '12 at 16:44

Main concern - they only need to figure out the admin password to get everything else.

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    Obviously, huge concern. Is there another method to setting up the Wordpress core files in a safe place with child sites running off that core? This way you only update one set of core files for updates, enhancements, plugins, etc. – csi Jul 8 '12 at 15:16
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    I don't really see how this is relevant because this is a concern for ALL sites, not just MU installs. – Pippin Jul 8 '12 at 15:25
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    People using passwords that can simply be "figured out" by intruders should stay away from the nets. – its_me Jul 8 '12 at 15:36
  • @Pippin - With multiple installs he has multiple sites, multiple usernames, multiple passwords, multiple databases, etc. – AndrettiMilas Jul 8 '12 at 16:40
  • @AahanKrish Ever heard of hacking? – AndrettiMilas Jul 8 '12 at 16:40

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