Developing applications that target multiple version of Office on a single computer can be difficult, daunting, disturbing, and down-right dirty.

The Microsoft Office team has performed some herculean tasks to ease our burdens, but there are still some hurdles to overcome.  Having multiple versions of Office installed on a single development machine is not possible and it appears that you cannot install the Office PIAs on a machine that doesn't have that version of Office installed (e.g., you cannot install the Office 2003 PIAs on a box with Office 2007 on it).  Additionally, having multiple development environments each targeting a specific version of Office is not always practical.

It is fortunate that add-ins created targeting the Office 2003 PIAs will work seamlessly in Office 2007 (they will not, however, be able to take advantage of the new features of the 2007 system such as the Ribbon, etc).

If you have a VS project that was built on a box with Office 2003 + VSTO 2005 SE + Office 2003 PIA and you open it on a machine with Office 2007 + VSTO 2005 SE + Visual Studio Tools for the Office system 3.0 Runtime, you will be prompted to upgrade your project to the new office platform.  Upgrading your project will have the unfortunate side-effect of rendering the project useless on your other dev environment that doesn't have Office 2007, etc on it.

Fortunately, there is a handy VS setting neatly tucked away in Tools -> Options -> Office Tools -> Project Upgrade called Always upgrade to installed version of Office.  Unchecking this option will allow you to open the project in Visual Studio without being compelled to upgrade.

I find it somewhat comical that using VS2008 on a machine with Office 2007 + the two VSTO editions you can create a project targeting Office 2003 but when you reopen it you'll be prompted to upgrade (unless you have the setting disabled) it.

If you don't have them there, don't forget to add the Office2003PIA and VSTOSERuntime bootstrappers to %ProgramFiles%\Microsoft SDKs\Windows\v6.0A\Bootstrapper\Packages in order to compile your projects.