Can I have multiple blogs in one wordpress folder? If not, how do I make two blogs with wordpress (in the same root directory)?
Do you mean you have wordpress installed at something like: www.example.com/wordpress, and you would like more than one wordpress blog on that same folder? The answer, no. You could, however, have another blog in a different directory, such as www.example.com/ or www.example.com/wordpress/2/. I hope that helps I dont know if I understood your question correctly.
Yes, you understood perfectly. Thank you. So do I have to install the entire wordpress package in the folder /2/ to have a second blog? So in other words, is it one full wordpress folder = one blog?
You cannot have more than one instance of Word Press installed within the same folder. The reason for that is you may only have one index.php and one wp-config.php within any folder (only one of any file to be exact) and you may not have two sub-directories with the same name. Each instance of WP requires these directories: wp-content, wp-includes, and wp-admin. However, as r3dt@rget has said, you could install the WPs in different sub-directories with no problems. You can actually do that as many times as you like. Remember that you should create a seperate databse in MySQL for each WP installation.
Or you could just have two categories in your blog and code it so that each category displays its own page of posts rather than one page displaying all.