Ian,
You don't have to repeat everything, but it's not as smooth as it should be.
From the root of your AS7 dist
1)
cp -r standalone instance1
cp -r standalone instance2
That doesn't result in a lot of extraneous copied files.
2) Edit instance1/configuration/standalone.xml and/or instance2/configuration/standalone/xml as desired; e.g. as described on this page for avoiding port conflicts
3) To launch instance1
./bin/standalone.sh -Djboss.server.base.dir=instance1
4) To launch instance2
./bin/standalone.sh -Djboss.server.base.dir=instance2
Things that aren't as smooth as they should be
a) The resolution of jboss.server.base.dir isn't very smart. For example, to do the common thing and launch the script from within the bin dir you have to either use an absolute path to instance1/2 or do something kludgey like:
./standalone.sh -Djboss.server.base.dir=../instance2
2) The launch script directly references the standalone/configuration/logging.properties and standalone/log/boot.log files. So, if those files aren't present the server doesn't boot properly, and both instance1 and instance2 will use the standalone/log/boot.log as their boot log file (where logging goes until the boot process starts the logging subsystem.)
I've opened https://issues.jboss.org/browse/AS7-1752 for these 2 points.