directory selection

Hello Folks.

I am new to WordPress. I have a question on how to set up wordpress directory for being able to host multiple blogs.

I want to publish my first blog in mydomain.com/myblog as a subdirectory.

But I also want to publish my other blog from myotherdomain.com/myotherblog subdirectory.

So the question is where do I install wordpress. Do I need an install in each subdirectory, i.e. /myblog and /myotherblog

Or can I have wordpress run in its own web directory using an IP address, i.e. 222.454.345/wordpress and have this support my blogs being published from their own subdirectory.

And when I install wordpress, do I have to unzip it in the directory it will run from, or can I unzip the files anywhere and then copy them to proper directory. I have read the forums here and have seen conflicting information on whether files have to be unzipped in the working directory or not.

Thanks all.