I’m wondering if you simply copied your files from the sub directory’s install into the root directory? That wouldn’t be how you want to create a multisite. Check out the instructions here:
http://codex.wordpress.org/Create_A_Network
Secondly, if you go into your sub directory’s install, look at the wp-config.php file and compare it to the wp-config.php file in the root directory; do they have the exact same DB info? For a second install, you need to at least give the database a prefix so it can separate the two installs within the schema.
Hope that helps!
EDIT (from comments below): if you look in the .htaccess file of your root install you’ll see this:
# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>
# END WordPress
You’re going to need an additional RewriteCond to exclude the directory of your second install – otherwise the root wp install will handle the request.
The documentation to do that using mod_rewrite is here:
http://httpd.apache.org/docs/2.2/mod/mod_rewrite.html