Visual Studio 2005 vs 2003 - Backwards Compatible?

We're considering upgrading to MS Visual Studio 2005 from VS 2003. Our concern is backwards compatability with existing web apps. At the moment we have several applications running under ASP.NET v1.1 (mostly in C#) on our Win2K3 box. We intend on using the capabilities of .NET v1.1 for at least another year or so as we have several existing apps that were composed under VS 2003 and .NET v1.1.

My quesitons are:

1. Can VS 2005 be installed on the same development box with VS 2003?

2. Is VS 2005 capable of reading VS 2003 code and can compile code that is still compatabile with our existing ASP.NET v1.1 portal (we use Rainbow Portal) and existing .DLLs / Source in production that was compiled using VS 2003 / .NET v1.1 ?

Thanks.

I keep hearing rumblings that VS 2005 will break existing sites if used to intermingle with older VS 2003 code, or even recompiled by it.

1 Yes. .net 1.1 and .net 2.0 can exist on the same box also.
I have vs6, vs2003, vs2005 and vs2008(orcas) all running on the same machine and they do not interfere with each other.

2 vs2005 compiles and generally targets 2.0. The references to new programs created in vs2005 point to 2.0

One word. YES