What causes your water pressure to drop significantly when more than one faucet is used?

This problem lies with your pipe sizes. If the pipes size of your main line does not equal the supply for demand this will result in the current problem. For example, if your whole house is fed with half inch piping and you open two taps the volume of water has to be shared from the half inch pipe, thus causing a drop in pressure. Whereas if one installed three quarter inch main line "t-ing" off to half inch, because the three quarter inch will hold a higher volume of water when two taps are opened and the water shared, the drop in pressure will be hardly noticeable.