Wordpress MU or Standalone?
We have been evaluating both Wordpress and Wordpress MU (multiuser). Wordpress MU allows us to setup a domain (or sub domian) and then provide users the ability to create their own blogs instantly. Using Apache wildcard virtualhosts in conjunction with DNS wildcards allows the system to provide users with instant sub-domain hosts of their own which is pretty cool. But is Wordpress MU the answer for a single point install for all blogs that we host? Short answer is not at this time.
This works great for junkin.com. There is limited functionality to restrict who can create blogs. In this case users are restricted by email address domain. One can also black list domains.
The problem is that it does not work out of the box for more than one domain. If you want to use domain1.com, domain2.com, domain3.com, etc it requires some hacking. I did set it up and it was not a big deal, but I was not super happy with it. It requires manually adding data directly to the mysql tables. The added domains do not appear under the main wordpress MU install.
We decided to forgo the hack and install Wordpress MU where clients will be allowing users to setup many blogs (under one domain name)  and for each user with their own domain name, a standalone Wordpress install.
This obviously adds to our maintenance but seems like a reasonable solution. If Wordpress MU allows out-of-the-box support for multiple domains we will probably switch to it in the future as a single point solution.
UPDATE:
Wordpress MU does not work properly with the gallery2 plugin. This means that it will not work for many of the blogs I host. There are some hacks around this but it appears messy.
So our plans with Wordpress will be to utilize wordpress mu for free or trial blogs, or for clients who want to offer sitewide wordpress services. There are too many problems with trying to using a single wordpress install for all clients.
The ‘hack’ is not so difficult. And once done only one install is needed. Makes it easier to administrate!