Hi swong46,
I had the same problem as yours a few weeks ago (couldn't find how to have more than one Vlc running)
Unticking the "Allow only one instance" box in the simple settings is the first start (that you already did)
Unfortunately (and very sadly) it's not enough, now you got to tick "Show All settings", then in the "Advanced" Tab, you got to UNtick another box named "One instance when started from file" . Don't forget to Save your preferences then quit Vlc : now you'll be able to have more than one Vlc running when you click on several files in Windows Explorer.
In the future, if you want to switch between one and several instances of Vlc, just tick (or untick) this one and only box ("One instance when started from file") in the Advanced settings
Forget the other box ("Allow only one running instance) and keep it unticked undefinitely.
I alerted j-b a few weeks ago and asked him why Vlc interface was so complicated sometimes...he agreed and asked to open a bug track concerning this question, but i'm "soooo lazy" to do that, look at my nickname