Host machine is Opensuse 11.4
Virtualbox: latest
Guest Appliance: LAMP (TurnkeyLinux Debian squeeze) - latest versions
Other appliances are working fine.
Drupal: 7.14 (working fine on default site)
Purpose: local development server
I am quite familiar with multisite installations and have been running some since D5.
My LAMP is accessible on http://192.168.1.133. This brings up the default site which has zero problems. The next site I need to install on the dev server is in the form sub.example.com. I read the apache2 manual, created a NameVirtualHost, etc, in sites-available/default and created the symlink, I checked the includes and set up /sites/sub.example.com, a database, and settings.php to match, permissions are suitably relaxed for now. I tested the apache config and it reports my setup as "syntax OK". I have cleared browser cache and restarted apache repeatedly.
I have no local DNS and this might be the problem (but I am ignorant in this area).
To access the second site I enter http://192.168.1.133/sub.example.com. This fails (displays default site with "/sub.example.com not found") and I can see that Drupal's index.php may have trouble resolving the URL. I tried sites.php (set an array with several combinations). In fact I tried everything in the book with NO LUCK (and pretty soon, no hair).
SOLUTION (hope this helps someone)