Can a normal wordpress install be turned unto an Mu install

No, but you can do Tools->Export from your current blog.

Then install/configure MU and once you have a blog there, use the Tools->Import->WordPress option.

MU support forum:
https://mu.www.ads-software.com/forums/

MU site:
https://mu.www.ads-software.com/

awesome thanks

Does that save plugins, settings and everything?

No. Posts, pages, users, categories, tags, comments.