How do I set up a group blog where authors *also* have individual blogs?

Hiya, I’ve been blogging on WordPress as a single blogger for awhile, and I’ve also participated in some group blogs. However, I’m wondering how I might go about having a system where: there’s a group blog where contributors (with appropriate permissions) could share, but they’d also, on the same install of WordPress (if that’s possible), opt to have personal, individual blogs.

I know it’s very easy on WordPress.com to have a multi-user blog AND create new blogs under the same login. This is the same sort of functionality which I’d like to have on a standard install of WP which allows plugins, easy theme edits, and all that goodness.

What are some recommended ways of going about this?

Any pointers appreciated, thank-you!