How can I setup Alkaline to index multiple sites. Users should be able to select which site to search.

It is not necessary, although of course possible, to setup Alkaline a second time in a different location, or to run a second instance of Alkaline on a different port. Alkaline has extensive support for groups and multiple aliases; you don't even need to restart Alkaline to add a new fully configured site, it will pick up the configuration changes when the next indexing roundtrip is completed. To add a second site that is indexed and searched separately:

To search either of the sites with the same template, a checkbox or a dropdown menu has to be added. A piece of simple JavaScript code will do the job of replacing the form action parameter with the appropriate one. A good example of the code can be found at www.warez.com search engine:
<script LANGUAGE="JavaScript">
<!--

function setAction() {
 document.formName.action = 
  document.formName.selectName.options[
   document.formName.selectName.selectedIndex
  ].value;
 return true;
}

document.writeln('<form name="formName" 
  action="????????" 
  method="POST" 
  onSubmit="return setAction()">

 Search for 
  <select name="selectName">

 <option 
  selected
  value="http://www.server.com:9999/foo/search.html">
 Foo

 <option 
  value="http://www.server.com:9999/bar/search.html">
 Bar

 </select>

 <input type="text" 
  name="search" 
  value="">
 
 <input 
  type="submit" 
  value="Search">
 
//--></script>