I have not been able to get Wordpress MU to run under Dreamhost. I am not yet willing to say that it can’t be done, but while I have configured literally hundreds of 3rd Party scripts to run under Dreamhost I can’t get WordPress MU to work under shared-hosting accounts here.
I have not tried any of this in a while now, so I took a guick google and found that at least one user claims to have got it to work! Check out:
You might also be aware that, in the shared hosting environment, you may experience Dreamhost CPU usage llimit problems hosting numerous reasonably popular blogs.
As for your questions:
1)Nope, it is not pre-installed
2)I have not been able to find a way to do this
3)Unless there have been major changes to WordPress MU in the last couple of months, the only choice that I believe will work for you would be a dedicated server where you can configure your own system settiings to be compatible with WorpdPress MU. Currently, DH is not making such systems available, but they say they may be available later this year. The wiki article gives suggest it would be possible to use MU in a “shared” environmetn, but you would need to add a static ip feature, at extra monthly cost, to any of the shared plans (‘cept, I believe, the "Strictly Business’ plan)
I don’t want to be discouraging, and hopefully some other user who has continued to phutz with WP MU will report better success.
Good luck, and if you try it, let us know how/if you succeed!