WPMU Development Environment

Multisite is meant to be either one or the other, and it’s not meant to be changed. If I were you, I’d move it to a testing domain rather than a subdomain, since you’re going to have to change it back when it’s time to move, and I don’t know what sort of behaviors you’ll see.

Tutorial here.

Basically, back up your DB, change each blog’s URL, turn VHOSTS off in wp-config.php, turn the wildcard domain on or off depending, and redirect the old root URL to the new root URL.