"If I installed w2k server on my PDC, does it have any affect on my existing exchange 5.5 server (which is also a BDC and proxy server)? since w2k is doing away with PDC and BDC." No. In a mixed mode environment in a 2K domain, NT BDC's do exist. Therefore the move to 2K is somewhat transparent. However, make sure all Exchange service packs are installed, prior to the upgrade.
"And if I follow your procedure, Then I am not really creating a new domain am I? I am just upgrading existing PDC to w2k with the same domain and then introduce my 2 new w2k machines to the domain." Correct.
" I want to be able to do the upgrade and if things go wrong I can always fall back to my working servers, so there's no down time" Without introducing a new BDC the only option to "go back" is to promote the exchange BDC to PDC should the upgrade fail.
"Can I introduce my 2 new w2k server machines to the existing domain as member server then do the upgrade that way?" Yes. 2K can ONLY exist as member servers on an NT domain. Once the PDC has been promoted, then you can promote the 2K member servers. Promoting them prior to the PDC upgrade will prompt for a new domain.
Good Luck.
Hewissa
MCSE, CCNA, CIW