Is it possible to install BOTH 2000 and 2008 on the same machine (and have them as different instances)

Ideally, I want the 2008 to be default instance, with 2000 named "legacy" or something...

We have an application that I'm not 100% confident of upgrading to 2008 db... But I am in the midst of re-writing it to use 2008.

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yes, you can have both versions running on the same server simultaneously.

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