We have successfully achieved creating multiple sites with one instance of Drupal via Aliases in the Cloud Sites platform. We just tested and seems to work fine!
Last week, on the recommendation of several people from Mosso, we set up a Cloud Sites account with the intention of migrating 80 websites into that platform all running on a single Drupal install. I was told on the phone by 2 people at Mosso that this was do-able. After the initial installation and testing, we were unclear as to how this would work with Apache config access so that we could configure the virtual host entry in httpd.conf. So, I tweeted this question out on my Twitterfeed. Someone from Mosso responded saying that in fact, what we were attempting wasn't possible - that we, in fact, needed a Cloud Server. Also, we asked one of our consultants and were pointed to this blog post. Very frustrating...
But, I persisted with Mosso and setup a Cloud Servers account and called a meeting with our current systems people. In the meantime, I canceled the original Cloud Sites account at which time I was contacte by an Account Manager at Mosso who inquired as to why we were canceling. I explained the situation and he responded that I had gotten bad info. That, in fact, we CAN, I repeat, CAN run multiple sites from one instance of Drupal in the Cloud Sites platform. That, while they don't support wildcard DNS, they do have an "alias" system that allows for subdomains or other domains to point to a single instance of Drupal on another site. So, we could have www.oursite.com as the "primary" site where Drupal is isntalled and many subdomain.oursite.com sites that, via the "alias" in Cloud Sites, point to the www.oursite.com install and are thus run by it, Drupal-speaking. This was fantastic news. We really didn't want to have to mess with a server, keep it up-to-date, etc.
So, now we're testing this by attempting to point real domains that we own to our new Cloud Sites IP and see if the aliasing will work. It looks promising as it worked on a local installation we have of Drupal here. But, through all of this, I have to say that Mosso's so-called "fanatical tech support" is the real reason that a) we figured this out and b) are still a customer of Mosso. Thanks, Mosso folks!