When you install FCS 2, it will overwrite version FCS 1. Apple does not recommend having more than 1 version of FCP on the same boot system. That is why it is recommended to clone your system HD before you install.
Up until Final Cut Studio, it was possible to have multiple versions of FCP on the same system and work without conflicts. Before upgrading, you would rename your Final Cut Pro Application. I still have version 1, 2, and 3 on my G4 400 and my G4 Dual Gig I have 3.04, 4.5 and 5.04. Both those systems are retired.
Steve Eisen
Eisen Video Productions
Director-At-Large
Chicago Final Cut Pro Users Group