The second way is to install each blog in a subdirectory:
The third way is to use WordPress’s built-in multisite featur, which will mimic either of the above behaviours, but is a single WordPress install, rather than multiples WP installs. (Each of the methods above would require three instances of WordPress.)
Please note that none of these are theme-related or theme-dependent. You can have the same theme on each blog, or a completely different theme on each one.
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