People mostly talk about the differences between WordPress and WordPress MU and an official FAQ says that:

Basically WordPress MU is a wrapper around the core WP code that virtualizes multiple blogs. The code that differs is in some bootstrap files, and administration for multiple blogs and users. It’s tough to say exactly what percentage of the total code this comprises, but it’d be safe to say that 95-99% of MU is core WP.

But in an announcement at WordCamp San Francisco, Matt Mullenweg, the founder of WordPress, he announced that the WordPress version (people use) and the version that many professional companies and larger sites use (MU, Multiple-User) will be merging. As Matt is celebrating the 6th anniversary of the open source blogging software.

Many people who use the traditional version will find it easy to create additional blogs, it is sometimes prominent when you want to easily add more blogs (at subdomains or folders) without having to run the install scripts or manage them from completely different admin areas. The single install will help more people who wanted to use that feature to use WordPress without having to worry about converting to the MU version in the future.

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It appears as though many details surrounding the conversion profess are unclear. Whether you would have to do a manual conversion (replacing some files) or if this would be completely built-in is up in the air. What we do know is that WordPress as we know it is becoming more of a complete content management system than ever before.