>>They are the different instances of SQL Server. You either have multiple instances running or have installed, uninstalled, then reinstalled.

Additionally, SQL Server 2005 creates MSQL.n directories for Reporting Services, OLAP, etc.

>I am sticking my SQL Server 2000 database into the MSSQL.1.

You can put the database files into any directory on a drive that is local to the machine hosting SQL Server. Also, default locations for database and log files can be set on the Database Settings page of the Server Properties form. On my local machine, I store most user database and log files in E:\SQLData, just to make them easier to find.

Chris