No matter which of the three address I hit, they all go to the first entry in my virtual hosts. What am I missing? Also, is it correct to use the <Directory> directive inside <VirtualHost>?

ServerName 888.888.888.888
NameVirtualHost *

# ADDRESS 1
<VirtualHost *>
ServerName *.address1.com
DocumentRoot /home/www-address1
</VirtualHost>

# ADDRESS 2
<VirtualHost *>
ServerName *.address2.net
DocumentRoot /home/www-address2
</VirtualHost>

# ADDRESS 3
<VirtualHost *>
ServerName *.address3.com
DocumentRoot /home/www-address3

<Directory "/home/www-address3">
Options None
AllowOverride None
Order allow,deny
Allow from all
</Directory>

<Directory "/home/www-address3/admin">
Options None
AllowOverride None
AuthType Basic
AuthName "Admin Privileges Required"
AuthUserFile /usr/local/apache2/passwd/.htpasswd
Require user admin
</Directory>

<Directory "/home/www-address3/share">
Options None
AllowOverride None
AuthType Basic
AuthName "Private Share Directory"
AuthUserFile /usr/local/apache2/passwd/.htpasswd
Require valid-user
</Directory>
</VirtualHost>

I think the ServerName needs to be absolute - you can then use wildcards in the ServerAlias

Yeah - I believe that's right. You'd need to have dev.address1.com, ftp.address1.com etc. all listed as serate virtual hosts

My ServerName is set to my static ip address (I used 888.888.888.888 so my ip is not posted). As for the second replay, I do want everything (*.address3.com ) going to each domain name. These are three different domains.

Sorry, that worked...

ServerName www.address1.com
ServerAlias address1 *.address1.com

Not sure how I missed this...
http://httpd.apache.org/docs-2.0/vhosts/name-based.html