a few steps that I use, I assume that you already installed web2py :)
0) set your domain at your registrar to point to webfaction dns servers
1) add your domain to webfaction domains
2) set your domain to be handled by your app (see webfaction's websites)
3 )create a routes.py (or rename routes_example.py) file with the content
routes_in = (
('(.*):https?://(www\.)?yoursitename1\.com:(.*)/', '/yourapp1/'),
('(.*):https?://(www\.)?yoursitename2\.com:(.*)/', '/yourapp2/'),
)
def __routes_doctest():
pass
if __name__ == '__main__':
import doctest
from gluon.rewrite import *
load(routes=__file__)
doctest.testmod()
4) restart your server (apache, nginx or whatever server you use)
this kind of installation doesn't need multiple web2py's installations