1. Version 2002 will be fine for most features.
2. I think any C# book will be fine to start with. Don't by an expensive one, since the book will only teach you the basics anyway. You can learn all the rest from the MSDN and the Internet. If you have any questions don't hesitate to ask. Most questions are not as dumb as you think they are.
You can code asp.net with anything, You do not need vs.net 2003, or even 2002. I do not suggesting using something as basic as note pad because it would be a pain in the butt with no syntax hylighting, line numbers, or intellitext, but there are several good things out there. I use dream weaver myself. You can also download webmatrix, its a free asp.net ide.
version 2002 is fine but solution files of 2003 can not be opened in 2002. So you have to create a different solution and add project files.
Also u can find .net tutorial from micrososft which is the best way to learn .net
If you are familiar with VB 6 (which has some syntax simialarity to classic asp) - Brian Bischof has a great quick reference for many common tasks. "The .NET Languages: A Quick Tranlation Guide" (isbn 1-893115-48-8)
"I don't know" is not an acceptable answer.
"I don't know, BUT I can find out" IS an acceptable answer.