I was able to use it on a Sharepoint 2003 site to edit pages and save them back to the Sharepoint server w/o any ill effects. It does give warnings that any of the Sharepoint HTML tags are no good in IE 6.0. Doesn't seem to matter though.
However, all of the ASP related Toolbox components are .NET 2.0 and will not run in the .NET 1.1 environment on the development box or Sharepoint 2003 server.
I'm just looking for something more reliable and stable than Front Page with Sharepoint.
My personal opinion is that it is best to use FP 2003 with SPS 2003 / WSS 2.0 and SPD 2007 with MOSS 2007 / WSS 3.0 sites.
Although it's possible to use SPD 2007 with SPS 2003 / WSS, as you've seen it only means you need to avoid functions that don't exist in SPS 2003 / WSS and I'm sure doesn't in any way make it more stable and reliable *with SPS 2003 / WSS sites* than FP 2003.
Mike Walsh