There is a way to rename the default instance name using the application file;

c:\Program Files\Microsoft SQL Server\90\Tools\Binn\VSShell\Common7\IDE\ASInstanceRename.exe

I happened to encounter this error when trying to install SQL Analysis 2000 with existing SQL 2005 already installed but was not able to due to the instance naming conflicts. If you know a better way to work around it, do leave a comment.