The 6.0 distribution kit uses the cvirte.msm found in it's redist folder. Therefore, it will distribute the 6.0 RTE on a system that has no cvirte.dll or an older cvirte.dll.
If you build a distribution with a CVI 7.0 then this will take precedence and not allow any older RTE to install. This is by design, and why we maintain backwards compatibility.
The RTE above is what gets installed in your System folder and the environment uses at design time. there can only be one RTE on any given system, but the RTE can be shared between different environments.
Jeff