Making it modular

[eluser]Phil Sturgeon[/eluser]
Nope, system and application are two very similar folders, but not the same. Rename system to codeigniter and put it wherever you like.

Then no site will need a system folder as long as they use those settings in their index.php

All your libraries (that you dont want shared), controllers and models, etc go into application folder, which in this example is your new sites public_html.