The X3 install allows prior versions to co-exist. It installs most release-specific items to separate folders.
Please note that the Cakewalk Plugin Manager is different, and I believe it may replace the older one. PLEASE note that I cannot state this as factual - I believe my X3 install changed the X2 plugin manager (I am not at my music computer at the moment).
Someone else will hopefully chime in with info on the above.
But, I can tell you that regardless, on my system X2 and X3 live happily next to each other, and others have X1 and X3 playing nicely, and I would be fairly confident in there being some folks that have as far back as 8.5.3 as well.
X3 WILL have a learning curve, but is well worth the upgrade. SOOO many nice things, once you get used to the massive change between 8.5.3 and X3.
Bob Bone