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I will try to help you out on this conversion process, to migrate the projects from v7 to v8 all you need is give access to scriptcase version 8 to the scriptcase version 7, if you are able to make a full copy from your v7 and put it in the same wwwroot folder from v8 it will go with no problem.
If I understand correctly the WHOLE SC7 environment needs to be moved under the wwwroot/sc8 - is that right?
You can have both installations working on the same machine after the conversion, the v8 installation must access the v7 installation database in order to proceed with the conversion, that is how the conversion is done.