If they are all subdomains under the same blog installation, then no. If they are separate domains, then yes, install it on each one. You are likely picking up the other sites files because you selected to scan files outside your wordpress folder on the server. This option is on the options page.
If you are still getting the api error, try checking the box on the options page that says 'disable config caching' near the bottom of the page.
Thanks!
tim