Is it possible to run FF3.x and FF4RC side by side?

As far as I know, mozilla firefox creates a directory in home folder/local settings in case of windows. So when I try to run firefox 4 rc and firefox 3.x only one is launched, is it possible to have these two run side bye side?

In some cases you may need to pass -no-remote in order to inhibit Firefox from opening another window from the existing instance instead of starting a new instance.

Yes, I do it. You can use the same profile (it will disable extensions, etc. if they're incompatible), or create multiple profiles. See this article and the wiki.

Yes; it requires two things though.

1. Create a new profile like Matthew says
2. Pass -no-remote to firefox OR set MOZ_NO_REMOTE=1 (deprecated)