.NET 1.1 and .NET 2.0 can co-exist, therefore VS2003 and VS2005 (or variations on that) can as well. I'm not sure however if the Express editions can co-exist with a full VS2005, but there wouldn't be much need if you have the full version.
An important thing to note: If you run your sites in development using IIS (you are already with .NET 1.1, and you *can* in 2.0 if you so choose) you must set the appropriate framework version in the IIS virtual directory.
-Peter
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