Multiple blogs on one (sub)domain on lighttpd server

Okay, I hope someone can help me with this – as yet, Google has yet to supply any answers.

I just updated my hosting server to run lighttpd instead of Apache, as it was crippling itself with memory issues. Most of the sites I host are WP based, but fortunately I’m running Kloxo on my server and it automatically sets up rewrite rules for WP on lighttpd at the click of a button. It also provides an area in the admin to add your own custom rewrite rules – I guess this is what I’ll be needing to solve this problem:

So far, all the WP sites I have hosted on their own domains are running fine after the change.

However, I also have a subdomain I use as a “development area”, and at any one time it has two or three WP sites running there, in subdirectories e.g:

dev.domain.com/site1
dev.domain.com/site2

These are behaving very strangely using Kloxo’s standard rewrite rule for WP. Can anyone suggest a way to create a custom rule which will allow me to run several sites in subdirectroies of the same domain? I don’t mind altering the rule each time I put up or take down a new site to test – I understand it must refer to the installation path(s) of the WP sites for permalinks to function correctly.

Is this actually possible, or am I best just to create a new subdomain to test each site (I could make that work right now, I just would prefer not to if possible), e.g.:

site1dev.domain.com
site2dev.domain.com

Any help much appreciated!

Cheers,

Owen