There is a plugin for that: WP XAMPP Multisite Subdomains. Unfortunately, there is no English description available. I’ll try that here.
The following guide will set up a multi-site under mu.wp with subdomains.
1. Basic Installation
Start with a fresh installation of WordPress and XAMPP. Create a network for subdomains. Do not create any sub site yet.
My XAMPP is installed in E:\xampp, WordPress in E:\wordpress.latest.final, and my site specific directories in F:\sites. There is a directory F:\sites\_logs for log files.
Make sure to adjust the paths in the following examples to your set up.
2. The hosts file
Open the hosts file. On Win 7 that’s probably on C:\Windows\System32\drivers\etc\hosts, and you need administrator rights to edit it.
Create a separate section like this:
# BEGIN XAMPP-127.0.0.2
127.0.0.2 mu.wp
# END XAMPP-127.0.0.2
Note we use 127.0.0.2, not 127.0.0.1. This is important.
Save the file, close and forget.
3. The httpd-vhosts.conf
Open the Apache vhosts file in /apache/conf/extra/httpd-vhosts.conf.
Create a new virtual host. If that is your first virtual host you need a generic vhost first.
generic vhost
Should be the first virtual host in the file.
<VirtualHost *:80>
DocumentRoot "E:/xampp/htdocs"
ServerName localhost
<Directory "E:/xampp/htdocs">
Options Indexes FollowSymLinks
Options +Includes
AllowOverride FileInfo
AllowOverride All
Order allow,deny
Allow from all
DirectoryIndex index.php index.shtml index.html index.htm
</Directory>
ErrorLog "F:\sites\_logs\default.error.log"
CustomLog "F:\sites\_logs\default.access.log" combined
</VirtualHost>
our multi-site vhost
<VirtualHost 127.0.0.2:80>
ServerName mu.wp
DocumentRoot "E:\wordpress.latest.final"
<Directory "E:\wordpress.latest.final">
Options Indexes FollowSymLinks
AllowOverride All
Order allow,deny
Allow from all
</Directory>
ErrorLog "F:\sites\_logs\mu.wp.error.log"
CustomLog "F:\sites\_logs\mu.wp.access.log" combined
</VirtualHost>
Make sure all the paths are correct! Restart Apache.
4. Install the plugin
Install the plugin WP XAMPP Multisite Subdomains as a MU-plugin. Usually in wp-content/mu-plugins.
Done.
You can create new subdomains now in http://mu.wp/wp-admin/network/site-new.php, the plugin will update the hosts file automatically, and your new sites are available immediately.