can there be any full-feature multisite blogging engine on ruby(rails)/php?
The conventional Wordpress 3. installation consists of Multisite Support (MS)
You are able to Download it here.
This is a help guide to migrating multiple sites to Worpress 3.0 Multisite.
I'd make use of the product which John Nunemaker arrived on the scene with, Harmony. Application built very solid on Rails and makes blog creation easy together with any kind of personalization you need to add.
Wordpress (The MU version) :)