I have three websites in one file. How do I separate them into three individual files?

Duplicate the domain file 3 times (keeping the orignal as a backup). Name each domain file for the website you want it to contain. Then open each domain file and delete the two sites you don't want it it.

Since you're running Mt. Lion you'll need to read the following in order to be able to open the different domain files.

In Lion and Mountain Lion the Home/Library folder is now invisible. To make it permanently visible enter the following in the Terminal application window: chflags nohidden ~/Library and hit the Enter button - 10.7: Un-hide the User Library folder.

To open your domain file in Lion or Mountain Lion or to switch between multiple domain files Cyclosaurus has provided us with the following script that you can make into an Applescript application with Script Editor. Open Script Editor, copy and paste the script below into Script Editor's window and save as an application.

do shell script "/usr/bin/defaults write com.apple.iWeb iWebDefaultsDocumentPath -boolean no"

delay 1

tell application "iWeb" to activate

You can download an already compiled version with this link: iWeb Switch Domain.

Just launch the application, find and select the domain file in your Home/Library/Application Support/iWeb folder that you want to open and it will open with iWeb. It modifies the iWeb preference file each time it's launched so one can switch between domain files.

WARNING: iWeb Switch Domain will overwrite an existing Domain.sites2 file if you select to create a new domain in the same folder. So rename your domain files once they've been created to something other than the default name.

OT

See this page for the location of the Domain.sites2 file...

http://www.iwebformusicians.com/iWeb/iWeb-Tips.html

... and this page for how to access the user library and open separate Domain files when running Lion/Mountain Lion without having to go into Terminal...

http://www.iwebformusicians.com/iWeb/mountain-lion.html

Splitting the Domain file is as OT has described except the files retain the Domain.sites2 name and are placed in separate folders - each with the name of the website. These folders can be dragged into a master folder - "iWeb" - and this can reside in your Home folder so that it is visible all the time.

Here is a video on splitting the iWeb domain:

http://www.youtube.com/watch?v=1Qk0f1h3gcg