Run Multiple Instances of Windows
Is this multiple enough? :)
Now, this is only WMP 9 on Windows XP but I'm certain this will work with WMP 12 on Windows 7 too (unless you're using 64-bit Windows, that is).
How is it done? walk in the park, install Sandboxie and run multiple instances of pretty much anything you want.
Sandboxie is free and works with all 32-bit versions of Windows. however, if you want to create multiple containers, you'll have to register the software, in return you'll get lifetime upgrades and you may install Sandboxie with your registration code on any computer you own.