How to Configure WPMS to allow User Plugin/Theme Installs

Hi,

I’m just curious how WP would be modified to allow users to install their own plugins and themes much like wpengine.com and page.ly as well as other WP specific hosts? Does it involved “hacking” the core? Does WPMUDEV have a plugin to solve this issue? Can you help with this? Any information provided would be greatly appreciated.

Thanks,

Matt

P.S

If WP has to be “hacked” how are updates handled? (as the core update will overwrite any modifications that are made)