General developer forum

for 1) and 2), see http://moodle.org/mod/forum/discuss.php?d=13211 . The system presented by Martin Langhoff in that thread works well for me.

for 3) - just use a different directory for each one - e.g. /etc/www/school1, /etc/www/school2, /etc/www/school3.  Install a copy of the Moodle code in each directory.

3) is the easiest to set up, and allows flexibility for upgrading moodle for one school and not for the others.  management overhead can increase though - if you ever need to make a change to the code, you'll find yourself having to change the code for each of your installed moodles.

1) and 2) take a bit of work to set up the first time, but the management work later is reduced.