There are quite a few situations where multiple portals are desirable, or even required.  If your host only allows a single DNN install and single database for example.  For an intranet, each portal can be managed by a different department.  For a corporate site where sub portals are managed by different divisions.  A church or other organization, where each club has its own portal.  Personal sites, family sites, lots of legitimate reasons.

There are advantages to portals in using third party modules as well, many are licensed per DNN install.  You can use the module in five portals, but for five separate DNN installs you need five licenses, or an enterprise license.  There are also modules that let you share user accounts between portals, something you can't do with separate databases.

How you configure DNN really depends on how you use DNN.  Not everyone will need every option, but it's there for those that do.

Jeff

Yes, I understand the important points you are making.

I'm intending to host on a VPS running Virtuozzo, Plesk and WS2003 with IIS6 and wondered if it might be possible to assign a separate application pool for each portal on a single DNN installation? If so, wouldn't this provide a degree of protection between each site? I am intending to administer all the portal sites myself, so could just about get away with each site as a separate portal in a single installation of DNN.

However, in general I think that you, Jeff Cochran and Mitch Sellers are right to warn me against doing this for the reasons that you mention. I also think that the point I raised about the difficulty of separating the site from the others if required at some later date is a significant disincentive to using portals to implement separate sites.

If separate installations for each site is the preferred way to go, how about the possibility of installing a slimmed down DNN by specifying that you dont want to create multiple portals, thus leaving out some of this possibly unecessary code. Is this possible?

It's just that web space, memory, etc, being at a premium, I'm a bit apprehensive at how much space these multiple installations are going to take up in my VPS.

Alternatively, is there any way to share parts of an installation of DNN with others on the same machine, in order to save space?

As Darrin said you can run each "portal" in a seperate application pool by configuring IIS sites for each different host header. If you don't need SSL you can get by with a single IP address as well. I've done this quite a bit, but we started moving away from running multiple portals in an instance due to upgrade/customization issues.