Multiple Installations Permalink Issue

I have two WP blogs on the same domain installed in different directories. When opting for customized permalinks, the setting works only for one blog (when trying to access the other, ‘404.php’ for the other blog gets loaded). I am aware that this is due to the entries in the .htaccess file.

Problem: What should be the code if 2 blogs exist. We need to have customized permalinks for both the blogs.

Note: Placing the code for the blogs generated on the WP Admin interface one after the other in the .htaccess file, is not helping.

Is there an If..Else required?

If someone has tried it, please guide.

Thanks!