Lord knows why you'd want to do this, but it is possible. I have to do it to support as many client configurations as possible, but that's *my* nightmare.
I had CS 1.3 installed on the ICS_MSDE instance, just like the install directions told me to. Everything was default, so nothing strange about it.
I wanted to install CS 9 on SQL Server 2005 Express, though, not MSDE. I think that's the recommendation from Inmagic anyway. However, I wanted to keep CS 1.3 going on its original instance and not upgrade it.
All I had to do was install CS 9 in a different directory. So instead of letting it upgrade my CS 1.3 install at \Inmagic\Content Server, I forced it to install at \Inmagic\ContentServer9. I've done this before with DB/Text, and since this portion of the install has nothing to do with the database back-end, I figured I could get away with it for CS, and I was right.
When the time came to tell the CS 9 Admin tool what SQL instance to use, I pointed it at my SQL Express instance (I had previously installed SQL Express months ago). Hey presto. Actually, it wasn't immediate presto, because I had SQL Express configured to use Windows Authentication only and CS Workgroup needs it to use mixed mode (both Windows and SQL Authentication). Once I figured that out, though, truly presto was my name-o.
Now I have CS 1.3 running on MSDE and CS 9 running on SQL Express on my Win XP workstation. Some days after work I make them do little drag races. They also scrap with each other when I drop them into a bell jar.