Running several WordPress sites on same core / plugins?

Is it possible to run more than one site on the same WordPress core and a set of plugins?

I want to be able to have custom plugins and themes for each site, but have a base set that is the same, to make it easier to maintain.

Yes, it is possible.

You can setup subdomains sites like this: subdomain1.domain.com, subdomains2.domain.com.

Then, after you setup the network, use a domain mapping plugin to setup a domain name for each of them. subdomain1.domain.com becomes domain1.com, subdomain2.domain.com becomes domain2.com, etc.

There are several domain mapping plugins out there:

• http://premium.wpmudev.org/project/domain-mapping (the one I would recommend, but it is on a paid membership site)
• http://wordpress.org/extend/plugins/wordpress-mu-domain-mapping/ (free one, but I never used it)