AFAICT, it does not support multiple instances running at the same time.
I tried two methods, but both failed.
$ open -n /Developer/Platforms/iPhoneSimulator.platform/Developer/Applications/iPhone\ Simulator.app
LSOpenURLsWithRole() failed with error -10829 for the file /Developer/Platforms/iPhoneSimulator.platform/Developer/Applications/iPhone Simulator.app.
Using an alias (http://forums.creativecow.net/thread/71/860074) brings up a dailog box saying "Only one iOS Simulator can run at a time. Please quit iOS Simulator and try again."