No need for two iTunes installations, you can hook up more than one iPod to the same iTunes Library and have each sync differently as the iPod sync settings are stored on the iPod itself.
Just continue to allow your iPod mini to sync with the 4GB Smart Playlist iTunes created, and you can either have your 40GB iPod sync with your entire iTunes Library automatically or you can set it to "Manually manage music and playlists" and then just drag-and-drop the songs you want from iTunes over onto your new iPod.
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3G 20GB iPod | Contour Showcase | Shure E5 | Ety ER-4P
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