I hope I can explain this clearly enough.
I have two installations of WP: one is 1.2.2 (old) and 2.0 (new). I was using 1.2.2 on one site, and then I decided to upgrade to 2.0 but on a different site (with a different database and different username/password).
I made a new database on the new site, and had a wp-config.php file to match the new database. I uploaded the backup I made (from 1.2.2) to the new database, then used phpMyAdmin to modify the site and home URIs. I uploaded WP 2 files and then ran upgrade.php. It worked. I still have the 1.2.2 installation and all its files and its database in tact, all on a separate site.
The one problem I have with these installations is logging in. If I login to one admin panel, I can't login to the other. If I choose to login into 1.2.2 first, the login screen for 2.0 just keeps coming up no matter what I click. If I login into 2.0 first, then the login screen for 1.2.2 just keeps coming up.
Knowing that, I don't think it's a problem specific to one installation (although I might be wrong).
If I wait a while, or restart my computer, the 'status' of logging in gets cleared and I'm able to choose which blog I login to, but upon doing so I can't login to the other.
What could be the problem? I've tried clearing cookies and cache but I don't think it worked. If it is a cookie problem what could be causing both installations to create the same cookie... or something like that. I'm not too sure how these things work.