I am running Windows XP Pro

I have a two monitor installation arrangement configured to be independant
screens to which I can drag window to one or the other.

I can open two separate instances of Excel 2003 Via Start | Run | and
entering "excel" for each instance of excel I would want to compare.

I have googled to find out if this is the correct and only way to run two
instances of an application but the results are vague.

Question 1
Can anyone advise me how the method above works?

Question 2
What other methods can be used to achieve two instances of an application
running.