a bit confused as to what exactly you are asking but i'll answer anyway. also, this question does not seem drupal specific.
yes... you can have both sites in the web root so to speak. however, vhosts will allow you to run both sites from any directory you want. take a look at the apache documentation on vhosts..
if you are doing your development local, you can adjust your hosts file to have sites dev1
and dev2
(for example) point back to your local development box (localhost).
as for removing the folder from the basepath, vhosts will handle this for you.
your vhost config might look lke this in httpd.conf
<VirtualHost *:80>
ServerAdmin [email protected]
DocumentRoot /var/www/html/dev1
ServerName dev1
ErrorLog logs/dev1-error_log
CustomLog logs/dev1-access_log common
</VirtualHost>
<VirtualHost *:80>
ServerAdmin [email protected]
DocumentRoot /var/www/html/dev2
ServerName dev2
ErrorLog logs/dev2-error_log
CustomLog logs/dev2-access_log common
</VirtualHost>
http://localhost:8888/site1/
andhttp://localhost:8888/site2/