It's true that databases can have their own collations, but you can run into problems if they don't match the tempdb collation - it depends on how your code is written. I won't make any recommendations because I'm definitely not an expert in this area and it's been too long since I had to look into it in detail, but this might be one of those cases where running multiple instances of SQL is beneficial .... one instance for legacy apps, and one for whichever collation you choose to use going forward.