Option 2 should work, I just wrote http://wp.leau.co/2010/12/24/moving-a-weblog-to-a-wp3-multisite-weblog-system-on-mediatemple/
- themes: you should NOT network activate all themes, only activate them on a specific site via the site settings for a blog
- plugins: disable the setting in the network admin to display plugin etc..
How to enable a theme for a specific site
To network-enable or to not network-enable, that’s the question!
1 click on network admin
image http://wp.leau.co/files/2010/12/image_thumb4.png
2 click on themes
image http://wp.leau.co/files/2010/12/image_thumb5.png
3. Add your themes and make sure it says “network Enable” (so do NOT network enable them) (since then they would be available for all sites)
image http://wp.leau.co/files/2010/12/image_thumb6.png
4. click on sites
image http://wp.leau.co/files/2010/12/image_thumb7.png
5 Click on “edit” beneath the site you want to give access to a theme (or a plugin)
image http://wp.leau.co/files/2010/12/image_thumb8.png
6 Click on the tab “Themes” and find the theme you want to activate, then press “enable” beneath that theme.
image http://wp.leau.co/files/2010/12/image_thumb9.png
7 You are done, the theme is now available for that blog.