Multi-site setup based on paths on localhost

All the post and documentation I on multiple site setups seem to use DNS. I am wondering how to do this with paths on my machine (localhost). The closest answer I've found is this comment: http://drupal.org/node/20663#comment-56221

but here he is very creatively using virtual hosts and the hosts file to "fake" dns. I want to use just paths if I can or symlinks if necessary

The second part of the question is does each subsite get it's own admin settings? If not how do I choose themes and modules for the subsite.

Basically here is what I am looking for (I'm running OS X with Apache 1.3.x, PHP 5 and Mysql 4):

/Library/Webserver/Documents -- apache document root or http://localhost

------/Library/Webserver/Documents/pages -- Drupal 4.6.4 root or http://localhost/pages - default site will be here
------ ------ /Library/Webserver/Documents/pages /subsite1 -- subsite 1 root at http://localhost/pages/subsite1
------ ------ /Library/Webserver/Documents/pages /subsite2 -- subsite 2 root at http://localhost/pages/subsite2
etc ......

My latest attempt is set up the sites folder as follows:
sites/default -- settings.php set up with own db and base_url of http://localhost/pages
sites/localhost.subsite1 -- settings.php set up with own db and base_url of http://localhost/pages/subsite1 - has its own theme folder
sites/localhost.subsite2 -- settings.php set up with own db and base_url of http://localhost/pages/subsite2 - has its own theme folder

navigiating to http://localhost/pages works for default site.
Navigiating to http://localhost/pages/subsite1 gives a 404 error
Navigiating to http://localhost/pages/subsite2 gives a 404 error

What else do I need to do? Thanks much