If you have the oracle 8i installed, then you can use the database configuration assistent to create another database and start. Once it finished the configuration, you are set and now you have two instances on the same machine. Make sure that you give uniqe names to the instances.
Once the configuration is over, check the lsnrctl.ora and tnsnams.ora file and make the appropriated changes to listen and connect to the new instance.
what was your approach to start the new instance. In the mean time what do you mean that you had commented out the control and archivelog files. You would require to modify the contolfile to start the new instance. One best way for you to creat a new insatnce without going through the hassel of modifying things is tha t you could use
This a gui tool that would walk you through the database creation.
One other thing is that before invoking the servermanager and connecting as internal, make sure that you have set the ORACLE_SID=dev Once you set the ORACLE_SID environment variable, then try to invoke the server manager and start the instance