This is quite interesting — the ibiblio folks have announced The Lyceum Project. This is a multi-blog version of WordPress, but it is a different implementation from WordPress MU (which is the basis of wordpress.com). I was curious about what Lyceum was doing differently from WPMU, and that is addressed in their FAQ.
And of course, since it’s based on WordPress, it is also GPLed, which means that the source is freely available. Their bug tracker seems pretty active, which is good. We can surely hope to see some of their enhancements make their way into the main WP core eventually.