Separate installations.
I'm not sure how familiar you are with different types of modding. If you generally understand what is going on, this mod uses the DLL from naval AI version 1.3 (I think) as a base, but than adds its own changes, so you'd end up missing out on some features of both mods. There also are some XML and Python differences that would likely conflict.
If you aren't familiar with different types of modding and want a simpler explanation, the mods make some changes that will copy over each other, instead of being merged on installation. You still should be getting some of the AI changes, though, since Tholal says that a lot of these are completely within the DLL.
