I installed Moodle 1.6.3+ in a folder called "moodle16" parallel to folder "moodle" containing the current production version. When following the installation and visiting the url with http://domain/moodle16 (or http://domain/moodle16/install.php) to initiate the installation script, a blank page is produced and the following php error is recorded in the system log:
[error] PHP Fatal error: Cannot redeclare xmlize() (previously declared in /Library/WebServer/Documents/moodle/lib/xmlize.php:46) in /Library/WebServer/Documents/moodle16/lib/xmlize.php on line 70
Note the difference in the paths to the xmlize.php file.
If I rename the production folder to something else and change "moodle16" to "moodle", the installation proceeds as expected.
The error is not fatal since renaming the folder gives a workabout but it should be possible to install a newer Moodle version in a custom-named folder without having to disable the current service.