for example http://dogs.animalfun.com
Do I have to install Wordpress MU? Can it be done with normal Wordpress.Org?
Doing it with wordpress MU:
Wordpress MU Download
First step is to download it at http://mu.wordpress.org/download/ .
Once done unzip and upload to your hosting.
DNS Records (turning on wildcard subdomains)
I am going to go through the steps in turning this on with a dedicated IP address. I use a secondary name server at http://www.editdns.net . It’s free and very reliable. What this allows you to do is to point your *.yourdomain.com to your dedicated IP.
Simply add the domain you chose and it will create the basic dns entries. Edit the "A" record IP addresses to go to your dedicated IP.
Then ADD a new "A" record with *.yourdomain.com pointing to your dedicated IP.
Change Permissions
Wordpress MU installation requires you to set the root and the wp-content folders to WRITABLE. Once DNS resolves, go to your domain and it will show the installation pages. It will tell you what permissions to give these folders.. (SET THEM BACK TO WHAT THEY WERE WHEN DONE)
Installation
Follow the instructions as prompted. Make sure you have your MySql database info (host, db name, username, and password).
Select subdomain based option for this example. You can choose either sub domain based or sub directory based blogs.
In the path, leave it as is if your blogs will be in the root folder. If you put the install on a sub folder then add this to your path. For example, you can install at usersblog.yourdomian.com/blogs/ which would be in the blogs subdirectory of your root.
Also take a look here – http://discuss.joyent.com/viewtopic.php?id=5589
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