SQL Server 2005 Configuration Manager, Networking Protocols and Instance ID's

Source:
http://msdn2.microsoft.com/en-us/library/ms143547.aspx

An installation of Microsoft SQL Server 2005 consists of one or more separate instances. An instance, whether default or named, has its own set of program and data files, as well as a set of common files shared between all instances on the computer.

For an instance of SQL Server that includes the Database Engine, Analysis Services, and Reporting Services, each component has a full set of data and executable files, and common files shared by all components.

To isolate install locations for each component, unique instance IDs are generated for each component within a given SQL Server instance. This allows upgrade of a single component to future SQL Server versions without dependencies on other SQL Server components.

During SQL Server Setup, an instance ID is generated for each server component. The server components in this SQL Server release are the Database Engine, Analysis Services, and Reporting Services. The instance ID is in the format MSSQL.n, where n is the ordinal number of the component being installed. The instance ID is used in the file directory and the registry root.

The first instance ID generated is MSSQL.1; ID numbers are incremented for additional instances as MSSQL.2, MSSQL.3, and so on. If gaps occur in the ID sequence due to uninstalls, ID numbers are generated to fill them. The most recently installed instance may not always have the highest instance ID number.

Server components are installed in directories with the format instanceID\component name. For example, a default or named instance with the Database Engine, Analysis Services, and Reporting Services would have the following default directories:

Program Files\Microsoft SQL Server\MSSQL.1\MSSQL\ for the Database Engine
Program Files\Microsoft SQL Server\MSSQL.2\OLAP\ for Analysis Services
Program Files\Microsoft SQL Server\MSSQL.3\RS\ for Reporting Services

Instead of Program Files\Microsoft SQL Server, a custom path is used if the user chooses to change the default installation directory.