Before we raise too many tickets etc, I'm using this technique extensively on development and production servers without having to change anything in core.php (As of SS v2.3.6). That's using both virtual servers and directories beneath a web root.
The only file I have had to change is image.php as described in this thread.
This has been used with several modules, there was one module where I had to change something obscure (ecommerce trunk I think) but that was just to support my deployment scripts and not its core function.
I'm not exactly sure what your issue is but have you tried looking at .htaccess? if you're running in subdirectories of the web root then check that RewriteBase is set correctly in each directory you are installing SS.
EDIT: Just seen you're using 2.4beta - that's why you're having issues so perhaps raising awareness of this is the right thing to do after all as losing this functionality would be a huge step backwards for me!
Hope that helps, if not I can post up my installation script.