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WordPress MU, or WordPressµ, is the multi-user version of WordPress. It is ideal for people who want to set up a large network of blogs. WordPress MU is the underlying software that powers the WordPress.com hosted blogging service. WordPress MU is also used by newspapers, magazines, blog networks, universities and large companies running corporate blogging systems behind firewalls.
Using the WordPress multi-user edition, you will be able offer users an opportunity to sign up for a new blog. They will be able to securely manage their templates and settings without affecting any other users. You can have unlimited users with unlimited blogs, and users can have various roles (administrator, editor, author, contributor, subscriber) on each other's blogs. One or more Site Administrators can perform site-wide management tasks, including adding users and blogs, altering permissions and granting access to themes.
WordPress MU Plugins and Themes are controlled by a central system administrator. Unlike the single-user version of WordPress, individual WPMU bloggers cannot upload their own WordPress Plugins and Themes. The users can only select from the ones made available by the system administrator. Individual themes can be made available to all blogs or just to specific ones.
While WordPress MU users are blogging with a restricted version of WordPress, able to choose from WordPress Themes and Plugin options as set by the Administrator, there are still a lot of benefits.
WordPress MU is designed for hosts to offer hosting of WordPress blogs to individual users. WordPress MU is free, as is the single hosted version of WordPress.
For information on installing and setting up a WordPress MU site, see Installing WPMU.
The following is a list of documentation on the WordPress Codex that may help answer your questions about posting, creating categories and Pages, and managing your WordPress blog on WordPress MU.