If you're using good object orientation, you should never have to re-design the whole application. Besides, this stuff is easy. I'll help you out.

You might have mentioned this already, but how are you specifying which settings file to use? I heard you talking about two versions of the same application using different settings files, but that doesn't sound very good.

Have you thought about incorporating into the program an OpenFileDialog so they can choose which XML settings file to use? This way you can still only require only one version of the application but you can open up two instances of it and whichever configuration file you want.

Anyways, as time seems to be an issue, perhaps it would just be better to do it the sloppy way. Do you really need to install your application? Can you just have it in a folder? If you did that, then there would be no installer conflictions. However, I'm sure you can somehow install two different versions of the same applications, provided you edit the assembly correctly.