I have two separate DNN 5.6.0 installations on the same server box, connecting to separate SQL 2005 databases.   The first one ran for months, I added the 2nd installation a few days ago.  Today both sites are down, saying "This site is currently Unavailable Please check back later".  Then one of them came back up after IIS restart, and died again, the other one did the same thing.  After removing 2nd installation, the first one started working again.  There are postings in this forum saying you can run as many as you want -- is that no longer the case?

Yes, they are very separate.  The first one is a separate website in IIS, using its own SQL db.  The second one is a virtual directory of ANOTHER website in IIS, also using its own SQL db.  They also are using separate .NET application pools in IIS.  When both of them run, it looks like SQL connections start failing - only one of them runs, killing the other one.  After rebooting server or re-starting IIS, one of them comes up, the other one can't make SQL connections, dusplaying the "site is not available" page.  I am totally stunned..  I removed the virtual directory from the second website, and the first one started running just fine. 

I believe so.  Each installation has its own web.config, and 2 connection strings in each web.config file that look like this.  Database names, UserIDs and passwords are different.  The SQL server is a cluster, we are using instance "SQL2" and port 2263: 

<!-- Connection String for SQL Server 2005/2008 -->
    <add name="SiteSqlServer" connectionString="Data Source=SQL_SERVER_NAME\SQL2,2263;Initial Catalog=Database1;User ID=User1;Password=***********" providerName="System.Data.SqlClient" />
  </connectionStrings>
  <appSettings>
    <!-- Connection String for SQL Server 2005/2008 - kept for backwards compatability - legacy modules -->
    <add key="SiteSqlServer" value="Data Source=SQL_SERVER_NAME\SQL2,2263;Initial Catalog=Database1;User ID=User1;Password=***********" />