All stuff i talk about is freeware.
I hope you have a domain and hosting. I won't cover that. This tutorial will cover setting up a WPMU farm based on subdomains, not different domains.
First you need to ask your hosting to enable Wildcard DNS. Just ask the support. This is needed for WPMU to be able create subdomains by itself.
Then go to
WordPress MU › Download » and download the newest stable version in .zip if you are under windows and in tarball if you are under linux. (this tutorial will be directed to windows users). I use the release candidate version which is newer, but there might be some problems with it.
Now unzip WPMU and you have for example Dekstop/WPMU/ all its files here.
Go to your hosting and point your domain to the place where WPMU will be installed. for example /home/server/username/SEXFARM/
Also create a new MySQL database for your farm. Let's call it SEXFARM.
If you don't know how to do those things, ask support, they are very helpful. I recommend Dreamhost, their support has very fast reaction time.
Move all Files from extracted WPMU folder to your SEXFARM folder on your FTP. You will need a ftp client like flashFXP (windows recommended) or cyberduck (mac recommended).
If, at any time, you will be needed to make any changes to core files, I recommend using psPAD(windows) or textwrangler(mac).
After several minutes of uploading files, go to
yourdomain.com and the installation will begin. You will need to input your site name, and important - database address, name and password - if u dont know, ask the hosting support.
This was just the beginning in the next tutorial i will cover the plugins which u will need for a sBlog farm.