Help understanding connections to my hosting

The post title was hard to come up with because it's a bit hard to describe my problem. This is the scenario:

I have the basic hosting package which allows unlimited domains. I already have one domian hosted there. When I log in via ftp I see 3 directories: xxxx.org which is the domain I already have, logs and maildir, and a few other files.

Now supposed I want to TEST a new installation of wordpress or any other CMS/blogging tool completely serpartely from any domain I have hosted, what would I do? Is this possible? If I create another directory alongside xxxxxx.org and install it there, how would I access it in my browser, if it were possible?

Thanks for reading, hope this isn't an overly silly question.

Just creating a directory wouldn't a new domain.

You could just create a new directory for it (yourdomain.com/test) or even a sub-domain (test.yourdomain.com) and use it for testing.

If for some reason you don't want to do that, I suppose you could create a free dreamhosters.com subdomain and use that.

Yes you can do that by creating subdomain.example.com.

In your browser you just access it as http://subdomain.example.com/ or even http://www.subdomain.example.com

Use the control panel then domains > manage domains and click the link to add a new domain or a subdomain.

Then on the page that comes up enter subdomain.example.com in the 'Domain to host' box.

You can also select a user to manage the new location.

Then when you next ftp in you will see your original domain and the new subdomain.

When you use a one-click install you can then input the new subdomain where you want to install the one-click.

Okay thanks guys, that was very helpful indeed.