Can I have both 3.42 and 3.5 installed side-by-side? (Windows)

Yes and no.

You can have it installed side-by-side in two different versions and they work...

however, the problem is if you open a Project in 3.4, unity will always remember which project was opened as last. And both Unity versions share the same registry key. So if you start Unity 3.5 it will try to open your 3.4 project on start. That's ok so far, because it will ask you if you will convert it.

Now if you close 3.5 and start 3.4, 3.4 will attempt to open your project you imported/edited in 3.5. Because the project structure changed with Unity 3.5, Unity 3.4 will break your 3.5 project and everything will be messed up (no textures, pink objects, missing assignments etc.

The project will remain broken even if you open it with 3.5 now.

You can start Unity by holding Alt+Shift during startup, then it will let you select a project to open, instead opening the last project, which can be used to prevent this from happening. But there is still a risk that you may "forget" to do it and then break your 3.5 project when starting 3.4.

So it's up to you to decide. I don't recommend it, it's better to have a separate PC for Unity 3.5

As far as I know, you can. Just install it to a different location. I've done the same on Mac.

The only problem that I've had is once a project has been upgraded to 3.5, it can't be downgraded.

Wow! Thanks for all that information. It helped me arrive at a solution.

I'm going to run 3.5 in Bootcamp and 3.4 on the Mac side. Problem solved! ;)