Adrian Rossouw e-mailed me about aegir, a multi-site hosting system he had helped develop. I finally got around to trying it out on my local system, and I'm impressed. It easily handles the creation of virtual hosts and settings.php, and it can provision sites with different installation profiles. I could see people using this for the kind of Drupal hosting that many companies now do. Kudos to Bryght for giving this to the open source community!
It wasn't difficult to get up and running. Follow the installation wizard, and you're pretty much all set. I wonder if I can get our project to this level of awesomeness.