I did it, I just copied all the installation files to to the subdirectory I intended. Then I logged in to the initial wp installation and changed the WordPress Address (URL)and Site Address (URL). It promted a log in to the copy of the site and all seems good.
But I'm confused, I don't understand how I made the first installation become the second installation.. if that's what happened...? They have the same wp-config, using the same database.
But I couldn't access the copy untill I changed the URL and Site Address in the original. What is it that's happening here? Is a copy different from a new install? how does the server know the difference? Any insite would be appriciated. Still pretty ignorant about how wp works on a server. I'm used to easy Flash sites with no data base. Just point the url and go.