I did install JMS to a new Joomla 1.7 on a Ubuntu plesk server.
First I coudn't install it at all. I have to perform it from an URL.
Seems similar to the thread:
/en/forum/23-general-questions/6197-component-installation-impossible#6208
Second I got, while installation, a Jfolder create error. But I got also a "component successful installed" message.
Third I tried to perform the patch installation. I will get following message:

JFolder::create: Infinite loop detected
Unable to create destination
Error during installation of the file "administrator/defines.php"
The only OK Point is:
administrator/components/com_multisites/extension.xml

It must be something with my ACL on the server, but from my point of view everything seems ok. Any suggestions?

Now I did see that in the admin/patches dir is no directory for Joomla 1.7. Is this component ready for joomla 1.7? I did copy some of the patches manually from the 1.6.2 dir.
This helped a little bit.

I have the same problem. I tried to patch in Joomla! 1.5 - successful (on website). But when I installed the JMS Joomla! 1.6 or even Joomla! 1.7, so I could make a patch.
Please help repair and expansion. In support of my hosting explained that this is a bug extensions (JMS does not work well with the parent folder - root). I had extensions in the root directory. It is also interesting that Wampserver me it worked (Windows localhost). Otherwise, my hosting (professional) is built on Linux. And I wanted to ask whether it is important to me the "Unix Symbolic Links"? If I have to ask her hosting service?
Thank you very much.

Now I got the solution. I had to rebuild the original /installation directory. Then I copied manually the files com_multisites_V1.2.61.zip:\admin\patches\j1.6.2 to the corresponding directory. Then the patching went successful through.

First you didn't mentioned in your first post if you had use the JMS 1.2.61 or an older JMS version.
Only in your last post you written that you copied the JMS 1.2.61 file.

I suspect that you had used an older JMS version to work with Joomla 1.7.
It is recommended to use JMS 1.2.61 to work with Joomla 1.7

In addition, you mentioned in your first post that you followed and post in the forum.
If you had followed the tutorial video 3 and its description, you would have saw that there is also a procedure to install from a directory when a server has limitation like your server.
The current JMS size is almost 4MB.

Yes there is patches present in the distribution.
It is in the root of the patches directory.
If you didn't see them, this mean that you are using a old JMS version.

Perhaps you would have to check your JMS version and the "change history" to know if your JMS version is compatible with more recent joomla.
www.jms2win.com/en/faq/change-history-v12x

If you upgraded an existing Joomla 1.5 into a Joomla 1.6, it is normal that the "installation" directory is not updated as Joomla do not do it.
You have to remove the "installation" directory and repatch JMS to let him install the "installation" directory for your new Joomla version.
JMS contain the installation directory for Joomla 1.5, 1.6 and 1.7

Thank for your explanations.
Now I'm a good step further. I did install the JMS 1.2.61 in the first place!
New I did assign the Joomla FTP Layer. After a reinstall of the JML component without any error, I could install my first slave site. But I'm a bit puzzled because I don't find any symbolic link in the slave directory. Then I realised that there is no default template in my installation. Is this correct. I thaught there was one in the previous versions? But that is in my case a few years away. With a template symbolic links are created perfectly.

In the Slave created with no template, there is only the /cache directory and the two config files.
And all the path variables are showing to the master site. As well as the open_basedir variable. And I can't install any modules, components on the slave.

For the slave created with the template I have the problem that despite a correct DB creation and correct configuration.php the slave uses the configuration.php from the Master. But I have to do some more research here.