On my server I have drupal with a multisite sub-directory set up (example.com/www.site1.com), and do not use default for anything. However, when i go to default (example.com), I am sent to the default install.php (example.com/install.php).
How could I best prevent this from happening, and for example, show a custom index.html page when a user lands on just example.com?
You can't have an index.html in the root of your default directory, Drupal doesn't treat these directories like normal web folders. If you want example.com to go to a folder with a plain index.html file in it, you're going to need to edit your vhosts configuration. Right now, your vhost file probably looks something like this:
<VirtualHost *:80>
ServerName example.com
ServerAlias www.site1.com, www.site2.com, www.site3.com
DocumentRoot /var/www/YOURDOCROOT
...etc
What this is doing is redirecting all sites that match either the server name or server alias and sending them to the DocumentRoot folder specified. When it gets there, Drupal tries to map the http requests to the appropriate folder but finding none for example.com, it sends it to the default directory instead.
If you want it to go to a single-page index.html, you are going to have to remove example.com from your vhost above and setup a new one, pointing example.com to that new folder, ex.
<VirtualHost *:80>
ServerName example.com
DocumentRoot /var/www/EXAMPLECOMDOCROOT
...etc
and place your index file in there.
If instead you want Drupal to send all traffic to one of your subsites, you can try either of these two methods:
Remove the default directory (assuming there is nothing in there you want) and symlink it to the site directory you want it to be using instead, ex. if you want it to be pointing to site1
ln -s www.site1.com default
You could also point your primary domain there as well using symlinks, ex:
ln -s www.site1.com example
