So far I've tried to perform an installation of a program while trying to uninstall another (both prg are not related to one another), but the second action always crashed since I believe Windows does not allow this. But is there no way we can tweak Windows to be able to perform both actions at the same time, else whats the purpose of having dual processors etc if these things cannot be achieved?
I believe one processor could have handled the install operation while the other one, seeing that it is free, could handle the uninstall process. Opinions anyone...

I am not really very knowledgeable on the specific subject you mention, but I believe it has nothing to do with how many CPU's you have.

Im going to throw a guess out there that you are unable to do both at the same time because if you are installing a program, you are writing to your hard drive, and when you try to uninstall, you also need to be able to deal with your hard drive. So I guess it is a physical limitation, because a hard drive only has ONE Actuator. AKA can only do one thing at a time.

So basically, if I have 2 different harddisk drives connected on same MB (which unfortunately I do not have), can I perform simultaneous installations, keeping in mind the 1 drive = 1 actuator concept?

The dual processors should handle the individual threads with no problems at all. Actuators/heads do not come into this because the drive controller or the windows disk drivers will queue R/Ws to the hdd. But possibly the ms installer software could be doing something like creating temp files with non-exclusive names -> confusion.
I don't know, and because I'm not too fussed about saving seconds when installing etc, I aint looking. :)

Thats what I felt as well, that multithreading and/or multiprocessing should be able to cope with this, but was dismayed when it did not do so, may be the temp files issue coming in play here causing this...