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How would it know which instance of mirc to open the file in if there is more than one instance running?


If there's multiple instances of the same exe it would load them in all available instances through dde.

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Similarly how would it know which installation (or possibly non-isntalled (file copied)) to open the file in?


That problem is already solved. If you don't tell mIRC to register the filetype to c:\mirc.exe but do tell it to register it to c:\mirc\mirc.exe then obviously the second one will open. If you tell it to register both then it will also use the second one, or maybe it could add any other version that registered the file to the right click menu of the file.

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If it were possible to determine the exact installation of mirc to use, should it launch mirc performing any on start/auto connect options or should there be some sort of seperation between mirc and the scripts editor?


It will be the same as loading a script though File > Load in remote or /load.

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but launching/opening a mrc file with mirc seems like it would be a messy implementation at best.


That's because you think that installing two copies of mIRC and registering the extension with both is a reason not to include this. You would run into these kind of problems if you told two copies of any program to register the same file.