Recently we had to create a Drupal 7 multisite install that used subfolders of a single domain, rather than the standard sub domain approach.
This proved to be quite the challenge but we found the following solution courtesy of some lengthy discussion on the #drupal-uk IRC channel.
We were surprised about the lack of documentation or blog posts around such a set-up so for the future we're documenting the process.
In your Drupal document root create a symlink for each of your sites to the same document root folder:
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