We're starting to do a lot of Drupal hosting for various projects around here. It looks like we'll be having about a dozen or so Drupal-powered sites running by summer.
I'd been planning on putting together a "Learning Commons Drupal Distro" that had all of the modules that we like, and themes, etc. so I could easily set up new sites without re-downloading each module repeatedly. I was even planning on writing an install script, which would copy stuff into a specified directory and prompt for easy configuration. Turns out I won't have to do that...
Patrick just asked me to walk through the process of setting up a new custom Drupal theme, and I mentioned my plan. He looked at me like I was saying something really lame (it happens more often that I'd like), and then he asked why I wouldn't just use the concept of "sites" within Drupal to host them all from one installation.
Duh.
So, you can manage as many separate sites as you like, from one directory of deployed files. Just by adding a domain-specific configuration folder/file. Each site can use a separate database, or share a database with a custom table prefix. You can even have site-specific themes and modules, apparently.
And any updates to Drupal get instantly inherited by all sites. Why on earth didn't I latch onto this in the first place? It's SOOO much better than what I was planning, and makes Drupal even slicker for what we're doing. Sometimes a fresh pair of eyeballs really help to point out the obvious...