OK, this question should be closed as not-programming-related, this is really a question for the upcoming "sister" site but I'm going to try and answer it anyway. Now I've never used MySQL and someone can probably do a better answer.
Lets start with a google search
(5 mins later... decided to take the plunge after only skim reading a couple of results)
- download + install mysql essential package (mysql-essential-5.1.30-win32.msi)
- run configuration wizard
- run configuration wizard again (modifying db path, port no)
- take a look at http://dev.mysql.com/doc/refman/5.1/en/multiple-windows-services.html
- take a look at my.ini (and the backup)
- figure out that I need to make a copy of the data dir and merge ini with backup ini file and didn't need to run the config wizard twice. Should have just edited the INI to begin with (but that would require reading the manual.. too much work! Ini file is pretty well documented anyway though)
- merge ini files, make service name modifications
- run commands: mysqld --install mysql1, mysqld --install mysql2, net start mysql1, net start mysql2
20 mins, done.
Now we have step by step instructions for running multiple MySQL instances on a single machine, which will probably turn up as the first result in google next time anyone searches for it ;)