I've read with interest the discussions about central vs distributed Moodle deployment; a great conversation highlighting advantages and disadvantages; I learned much. My situation, I think, falls in the middle.
I'm using one server; it is running Moodle with IIS, MySQL, and PHP, and is serving multiple Moodle 'sites'. At present, each site has its own directory in 'webroot' and each site has its own replica of the current Moodle configuration (1.4.4+). I have modified Moodle to provide special handling for parents (see http://moodle.org/mod/forum/discuss.php?d=22035); as highlighted in the other discussions, keeping all sites up to date (e.g. alike) is at best inconvenient.
My question: can I have one copy of the Moodle files which are then used (shared) by the Moodle 'sites'? I would put the Moodle 'web files' (the .php, .html, etc.) in a directory in the web server's directory structure. Then in each of the Moodle site directories, have a specific config.php which 1) refers to the common directory for the 'web files, and 2) refers to that site's tables in the MySQL database.
For perspective: we're a small K-12 school division (2600 students) in the U.S., with all classes of a grade level in one of four school buildings. Each school building has its own Moodle "iSchool", tailored to their needs (do I need to say how needs differ, say between 1st grade and high school?).