multiple blogs or emulation thereof

i read on the site that multiple blogs are supported only if wordpress is installed once for each blog. this seems inefficient to me, especially as i have more than one author and it is complicated to cheap track of who logs into which installation.
knowing this, is there a method using categories by which i could emulate multiple blogs? for example, i could have one installation, but url’s of each blog would only display that category of entries:
installation: http://www.mysite.com/wp (has 3 categories)
blog1: http://www.mysite.com/work
blog2: http://www.mysite.com/vacation
blog3: http://www.mysite.com/music
any ideas? thanks in advance.