Even with Cisco MLS, each port is defined as a layer-2 switch port (with the
switchport command) or a layer-3 router port (with the
no switchport command). You can have virtual ports call SVIs for the VLANs of which the layer-2 switch ports are members.
In essence, a layer-3 switch is a layer-2 switch with built-in layer-3 routing. Remember that it is still a layer-2 switch, and the routing features may fall short of what you get with a dedicated router. You will also find hardware not normally associated with LAN switching (e.g., WAN ports) unavailable for most layer-3 switches.
Cisco has moved routing features in hardware (ASICs) to ease the processor and memory requirements normally associated with routing. A simple search of the Internet for
cisco mls turns up a lot of hits, including Multilayer Switching Overview:
MLS provides high-performance Layer 3 switching for Cisco routers and
switches. MLS switches IP data packets between subnets using advanced
application-specific integrated circuit (ASIC) switching hardware.
Standard routing protocols, such as Open Shortest Path First (OSPF),
Enhanced Interior Gateway Routing Protocol (Enhanced IGRP), Routing
Information Protocol (RIP), and Intermediate System-to-Intermediate
System (IS-IS), are used for route determination.
You will also find hits with links to Cisco documentation on how to configure MLS, including examples.