The documentation describes doing this here:
www.movabletype.org/documentation/enterprise/managing-multiple-instances-of.html
But it shows sharing the mt-static directory among multiple sites. Won't this create a problem? I would expect each separate site would need it's own mt-static directory for things like themes, uploads, user pics, etc.
Am I missing something?
Reported on Movable Type 4.2

Sort of. If you have some feature that requires an absolute isolation of mt-static between blogs, you'd probably have to install multiple copies of Movable Type. I don't know of an ability to define blog-specific copies of mt-static.
However, that's unlikely to be the case. I have about 20 some blogs managed in my installation of Movable Type. Most of them are just demos for themes that I have converted from WordPress, but they all share a single mt-static directory without any conflicts. In fact, it'd be a royal pain in the ass in terms of disk space on my shared host if I had to have 20 some mt-static directories.
Stuff like themes won't be an issue, as the contents under the themes directory are just CSS and image files. Plugin static data is also stuff that not only won't be an issue, but is stuff that you would actually WANT to have shared between multiple blogs.
I think one thing for you to keep in mind is that the "instances" of Movable Type are just logical instances. They're just a collection of data and settings under one single roof. It's not like WordPress where the installation of the blog IS the blog. That's one of the important features of Movable Type; it separates the CMS from the actual blog for the most part.
Does that answer your question?
Hi, Mike. I am new to Movable Type and would like to run multiple blogs on multiple domain URLs. I have reviewed the article that juanbro identified above. I am not a techie per se, so I don't know what I have to do in my "shared" directory or the mt-cgi documents to make this happen. My efforts so far have just frustrated me, including efforts to follow two different articles allegedly on point.
If there's a "do this, do this exactly, do not deviate right or left" article out there I would be extremely grateful. Thanks in advance for any help you might provide or others.
Many thanks, Bruce Godfrey
If you really, really want multiple mt-static directories, you're probably going to have to ask one of the mailing lists or something like that. The documentation you cited above is for Movable Type Enterprise, not Open Source or Professional. It's a pretty expensive version, so you're not likely to be in the market for it, unless you've got some serious hosting needs.
Unfortunately, at this time, it does not appear that you can have multiple mt-static folders for a single installation of Movable Type. However, I'm not an expert on this, and if you really do want this, it'd be a good idea to go to one of the mailing lists and ask there.
Thanks very much!