go to "manage domains" in the panel and add a sub-domain... such as test.yourdomain.com
for "Run this domain under the user:" select the same user the main site is running on. While you probably don't know how to do it yet this might make it easier for you later, if you want to copy files over.
Optionally (although I recommend it) you can go to goodies > "htaccess/webdav" in the panel and set up a password for the directory.. keeps nosey people, search engines and hackers away. Just be sure NOT to check the webdav box on that page. you can leave directory name blank to apply to the entire subdomain as well.
Then you can do another wordpress install there. The only thing it has in common with the main site is the ftp/shell user, which if you learn to us the command line you can copy files over to the other site easily using the command prompt.