Yes, both VS 2003 and VS 2005 can be installed on the same machine. It was a configuration tested throroughly before we shipped. The Migration Tool is safe. It prompts you to backup the web site before it migrates. If you back up your web site before you migrate you can always revert to the original.
For migration help see the migration forum http://forums.asp.net/1012/ShowForum.aspx
-Dan
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