Alex, we set up clients.museatech.net this way. Each client gets a subsite with a bugtracker and a bboard/forums instance. When they sign up, they don't get anything but once we go in and set the appropriate permissions they only have access to their site.
For another kind of site where you're not sectioning things off, this approach may not be very good. But for Janine's needs, a bugtracking site for clients, it's pretty ideal. At least in our experience.
There are probably instances that make it less relevant.
Either way, you still have to deal with the worst, most retarded UI ever devised. And that is certainly an objective statement.
talli