I use 1 eclipse instance for my website, the development of the eclipse plugin and for the the development of my Arduino code.
I have different workspaces though.
The whole idea in eclipse is that you have "perspectives" When I'm developing the plugin I'm in the "plugin development" perspective.
When I'm doing Arduino code I'm in the "C/C++" perspective.
I'm not sure why you have installation issues as I have had none and I'm using indigo as well.
If you are new to all this and are only focused on Arduino I advice you to use my plugin instead of the avr-eclipse.
You can find more info about it at http://eclipse.baeyens.it