Yes, you are on the right path. I currently have install folders for EQLive, Titanium, SoF, and SoD and they all work just fine that way. You don't need to install it on another drive, just as long as you install it to a separate folder.
Since you can't get it to install with an existing installation there already, you may be able to just move your P1999 install folder to another place, or just rename it to something like "Everquest99". I always name my different installs after what it is for like that so it is easier to tell which is which. Just remember that you will need to create a new shortcut for the P1999 folder if you move it. And you will want a separate shortcut for the normal Titanium install as well.
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