Issue with type families

[Tyson Whitehead]

The following code

  {-# LANGUAGE FlexibleInstances, TypeFamilies #-}

  import Control.Applicative

  class Z t where
      type W t
      z :: t -> W t

  instance Z (a -> b) where
      type W (a -> b) = a -> b
      z = id

  instance Z (IO (a -> b)) where
      type W (IO (a -> b)) = IO a -> IO b
      z = (<*>)

works fine, but if I try and generalize to from IO to the Applicative classes

  instance (Applicative m) => Z (m (a -> b)) where
      type W (m (a -> b)) = m a -> m b
      z = (<*>)

I get the following error

  Temp.hs:10:9:
      Conflicting family instance declarations:
        type instance W (a -> b) -- Defined at Temp.hs:10:9
        type instance W (m (a -> b)) -- Defined at Temp.hs:14:9
  Failed, modules loaded: none.

unless I remove one of the instances, and then it is happy.

Is this correct?  I don't claim to really understand the rules regarding type 
classes, but I can't see why these are overlapping.

Thanks!  -Tyson