Yep, you can create separate databases for each domain. I'd also create separate database users for each one. Something like this:
mysql> CREATE DATABASE domain1;
Query OK, 1 row affected (0.10 sec)
mysql> GRANT ALL PRIVILEGES ON domain1.* TO phpbb1@localhost IDENTIFIED BY
'phpbbpassword1';
Query OK, 0 rows affected (0.16 sec)
mysql> CREATE DATABASE domain2;
Query OK, 1 row affected (0.10 sec)
mysql> GRANT ALL PRIVILEGES ON domain2.* TO phpbb2@localhost IDENTIFIED BY
'phpbbpassword2';
Query OK, 0 rows affected (0.16 sec)
...etc.
You'd also need to install each copy of phpbb into its own /opt/ directory, and modify the httpd.conf templates accordingly. At least, that'd be my guess--I haven't tried it yet, as I haven't needed to.