Someone registers to read members content, can they create their own blogs?

Hi,

A blog I’ve been kicking for a while, one of the options I would like to give readers is to be able to start their own blog within my installation… subdomain… using their own domains if possible. Can a single WordPress installation offer this? Are there WordPress plugins that do if it’s not part of the main installation?

I’ve designed a WordPress blog for someone over a year ago, but don’t remember seeing anything where WordPress allowed signed-up readers the option to create their own blogs.