MSDE Instance

I searched in the .NET directory and found two MSDE folders, one in Program Files\Microsoft Visual Studio .NET\Setup\MSDE and another in Program Files\Microsoft Visual Studio .NET\FrameworkSDK\Samples\Setup\msde

I installed each at a time and they installed two instances of MSDE, one called MSSQL and another called ComputerName\MSSQL$VSdotNET

Is there any difference between these two? (i guess not) but dont understand the reason why it should be this way.

Well you ran two different setups probably created by two different teams. As to how they're different - do both start? Look in em. Funny, I must have followed a third set of instructions (my instance is called MSSQLSERVER)

Yes, both worked together and i had both in Add/Remove Programs. However I removed one as it was not needed.