WordPress MU (or multiple user) is that allows multiple themes on what is essentially the same WordPress database and plug-ins. And it can automatically create subdomains.
www.PuppetGuild.org is a WordPress MU site. While all the pages have a similar look, there are as of this posting 2 different themes in use on that site. Also there are subdomain. A subdomain is usually created with a URL in the pattern www.subdomain.MainURL.com. In this case there are PuppetGuild.org, newsletter.PuppetGuild.org, news.PuppetGuild.org, and shows.PuppetGuild.org. Subdomains accessed this way are not case sensitive. Non-MU sites that get converted to MU usually have to take the form www.MainURL.com/subdomain where the subdomain part becomes case sensitive. An existing site can be converted to the other format, but the conversion is tricky and often looses things in conversion.
Although MU has subdomains and multiple themes, it has the one advantage a simple updating. WordPress itself is constantly updated as are the various plug-ins for WordPress. There is a master site for MU and WordPress itself and all themes and plug-ins are updated at this site, all of the updates then are updated throughout the site with a simple one click.