When I have Netscape running in one X server and I run /usr/bin/netscape as the same user on the same machine, but on another X server, the /usr/bin/netscape wrapper first tries to run Netscape with xfeDoCommand, which fails because there is no Netscape running under that X server yet, and then proceeds to the killstale functon which kills the instance of Netscape happily running under different X server. I use netscape-communicator-0.76-0.6.2 on RH 6.2 + all updates.
This will probably not be fixed at this point.