I have experimented with both on Vista with Symbolic Links (Same thing as a junction) and have found that there is no performance difference. I would imagine that if I had a separate hard drive for each install it would be faster to have separate installs on each.

One thing you'll have to keep in mind, is that when patch day comes you may need to copy the files in wow1\* to wow2\* (not the subfolders, just the files) because the patcher will do all the dirty work it needs to in the first wow but that really leaves the 2nd wow in a very confused state if they modified the executable.