q1 - do I have to do that for just the Win32 D2007?

Yes, the IDE requires .NET 2.0

q2 - Will this break anything in the BDS 2006 if I still want to play with
.net stuff there still or anything else in there?

Shouldn't*

* I cannot be held liable if it does break <g> My 1.1 framework
installation has become corrupted (D2006 IDE runs fine, just can't
create .NET apps, but Visual Studio on the same PC also doesn't create
.NET apps now either) but I believe that was because of a .NET 3.0
beta installation.
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