I use Drupal here, and also for the LinkSphere project. The LinkSphere URL is in my institution's domain, and redirects to the site itself. Most things work fine - but forms do not get the right base URL. And so far, I haven't been able to figure out why.
At the moment, I get round it using a really dirty hack (complete with hardcoded element of the path - *shudder*)
We (I) have pretty much decided to use Drupal as the platform for our Virtual Research Environment. The number of excellent plugins for it mean that making a feature rich social networking site should be relatively easy. I have some concerns about the differing rates of upgrades, and I am also aware that politically within the institution there is a tendency to prefer 'paid for' software – but the power and flexibility of the system is hard to argue with, in my opinion.