We going to need a different folder/installation for green?
 

Or will we be able to use the exact same setup for green and blue?

Guessing it'll have to be a different one.

Chars will have different ini files but you use the same set up. The server tells your client which server/patch you are on and your client can handle it. Most of the stuff is purely server side though.

Rogean says you'll only need one folder: http://wiki.project1999.com/Green has the quote but I'm too lazy to paste it here.