This is the exact wordage vBulletin use in their TOS agreement.
Quote:
"If you have a valid license, you may set up an additional test forum in order to test code, template and database modifications. To make this clear to us and our license verification procedures, place it in a directory called 'testvb' and be sure to password protect it. It must not be accessible by the general public. "
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Yes, just create a directory, set up another mysql database, and install it like you did the original install of vB, just make sure it is 'not accessible by the general public."