Question regarding WordPress test install on existing WordPress site

Hello everyone, I have a quick question. I have never done the following before and want to make sure I will not create an issue.

I currently have a wordpress website installed in the root of the domain, and it works wonderfully. Without buying another domain for testing, but still retaining live sharing capabilities, I would like to install another WordPress instance on that one domain, in a folder. Like:

http://www.therootdomain.com/test/theNewWordPressIsHere

I will install the new instance using Fantastico, and installed the original instance with Fantastico. Will there be any conflicts from the new WordPress install? Rather than a folder, does the new install have to be on a subdomain like test.therootdomain.com?

Your insights are appreciated!

[ Bump deleted, that’s not permitted here. ]