DOH!
After some RTFM'ing,
which is your 'really_little_part' in the great game called 'open-source'
I found that the /etc/my.cnf was holding the info for the data dir and the sock, also, the "old" mysql client worked fine when using that as it was looking for the sock in the right place...
I would however be interested to know how I could configure the new version to read it's own my.cnf file and thus not interfere with the old version at all.
$ grep my.cnf /etc/rc.d/init.d/mysqld
# config: /etc/my.cnf
# /usr/bin/safe_mysqld --defaults-file=/etc/my.cnf >/dev/null 2>&1 &
/usr/local/mysql/bin/mysqld_safe --defaults-file=/etc/my.cnf >/dev/null 2>&1 &
-- shrek-m
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