Regarding the multiple directories:

this setup is usefull if you plan on configuring your UI and mods individually for each instance of WoW open. (at least i think that is correct). Otherwise they all draw on the same interface/addons directory to draw the UI's. Also i think there was some talk on multiple directories resulting in better load times (if spread across different HD's). I could be wrong though. I run multiple instances of wow from separate directories and it works just fine for me. Never have tried running from a single directory.