To what degree does CiviCrm play well with Wordpress multi site installations?
More directly - If I have a multi site install, what is the best way for each 'org' website to seemingly have it's own CiviCrm instance?
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I have a Wordpress multi-site that's working quite well. Note that there are two approaches to Wordpress multi-site: subdomain and subfolder (e.g. "site1.example.org, site2.example.org" vs. "example.org/site1", "example.org/site2".
I posted instructions on the wiki page Lobo mentioned for how to set up civicrm.settings.php for subdomain multi-site. I haven't updated it with subfolder multi-site instructions, but you can find them on my "CiviCRM multi-site checklist" page here: https://hq.palantetech.coop/projects/commons/wiki/CiviCRM_multi-site_checklist. If you follow the instructions on that page, each site should be more-or-less independent from one another - especially if you install Eileen's excellent multisite permissioning extension (install from github, not extensions directory!)
Might want to check:
search for "wordPress multi" on that page