I'd like to have a separate second installation of FO3 on my PC for mod making purposes, separate from all texture replacers and such I may have installed on my main FO3 installation. Is this possible? I have the regular FO3 version, not the Steam version, if that matters.

I can't remember if FO3 gives an option on install to "install for all users or just for this user", but if it does you may be able create a separate user account on the comp for modding with it's own install.

I'll have a look. I currently only have 1 account on my PC and I'd like to keep it that way if possible so maybe I'll see first if just copying a vanilla installation works.

Install it. Change the folder name. Install it again.
Then just change the folder path names to go between the two installs.

And for someone with the game already installed? Would it actually be okay to just rename the current fallout 3 folder and install a new game in the same directory?

I would just use something like garybash or that other "simple something" whatever the name is to create a new save with a specific load order, but my different games would have a bunch of different mods and I don't want the game reading over tons of inactive mods, because as I understand the game still reads inactive mods. Not to also mention textures only mods and the sanity saver of being cleaner with only the mods needed.

That is exactly what I was saying. Use the same 'old' folder name when you install the second time.

Default game folder:
\Fallout 3\

Rename it to
\Fallout Old1\

Then Reinstall (you may have to 'uninstall' first, but that will not be a problem since you have already renamed the game folder)

Now you have two game folders:

Working folder will be called:
\Fallout 3\
And the non-working can be:
\Fallout Old1\

Then rename \Fallout 3\ to something unique like \Fallout Old2\, and rename the \Fallout Old1\ to \Fallout 3\

Or just copy the fallout 3 folder then rename it something like 'Fallout3 OTHER' or something. Then just clean out the extra one, use that for modding, then swap that one and the original you copied depending on whether your modding or playing. No need to reinstall.

This has been brought up before.

There is an easier way to do this than duplicating the whole game install. Explanation is this:

I have a folder of: "C:\Program Files\Bethesda Softworks\Fallout 3"

And within that folder I have "C:\Program Files\Bethesda Softworks\Fallout 3\Data" and like, "C:\Program Files\Bethesda Softworks\Fallout 3\Data2" and perhaps "C:\Program Files\Bethesda Softworks\Fallout 3\Data3". Whichever DATA directory I am using as my live one will be named "Data" and I cycle the other DATA directory versions into different names. So, if things are as above, it is like I have installed the game 3 times. The game uses the one currenlty called "Data" and I get to pick which one that is by renaming among my Data directories.

The same thing goes for your savegame directories. Within the directory: "C:\Documents and Settings\Me\My Documents\My Games\Fallout3", I have a live "C:\Documents and Settings\Me\My Documents\My Games\Fallout3\Saves" directory, and then perhaps "C:\Documents and Settings\Me\My Documents\My Games\Fallout3\Saves2" and "C:\Documents and Settings\Me\My Documents\My Games\Fallout3\Saves3", which corresponds at any given time to my various DATA directories.

You maintain a set of DATA directories and their matching SAVES directories, and you're set. I have shortcuts to the top level directories on my desktop and I can rename the subdirectories at any time. Takes 30 seconds to swap between completely different games pretty much. Uncomplicated.

Hmmm that's pretty clever. Maybe I'll do that.

I've been using the same technique Tarrant mentioned to have 4 different load orders, for FWE, ART, FOOK2 1.0, and FOOK2 1.1 beta 2 (I just wish I'd thought to keep a clean directory.) One thing to note is that FOMM can export load orders, so when you swap Data directories you just import the exported text file, and you don't have to mess with rearranging the .esps and clicking checkboxes every time.