Yes, copy the folder. It can be to the same drive, just a different name, like -

G:\WoW\World of Warcraft\Wow.exe
G:\WoW - Slaves\World of Warcraft\Wow.exe

This way you have different config files for each one.

I have mine set up with Symlinks. I deleted the Data and Interface folders in my slaves WoW folders and symlinked them back to my Master's Data and Interface folders. This way the slave folder only takes up a tiny fraction of the space a full install would, but still allows you to maintain separate configs.