Which launcher? If you're using Knossos, during FSO setup it will ask you about the directory of your FS2 install (it can also extract the needed files from a GoG FS2 installer). The other thing it sets up is the folder where all the mods are downloaded into, I think it was called the root folder or library folder? I absolutely can't remember it.
The important thing is that the two should never be the same directories. I think Knossos disallows such a directory selection either way. The former is the location of original FS2, and the latter would be the place for mod and FSO data storage.