Basic need for this kind of installation arises when you want to test your web design for different versions of browser. And when it is the most popular browser, how can one, serious about the web-layout of his website, can ignore it?
Here is a very interesting 19-step tutorial – How to Install Two Versions of IE (IE6 and IE7) on One Machine, where I landed through Digg. It is very well designed with the help of screen-shots. Tutorial makes it possible by using Virtual PC software.