1. sure you can, no problems, as you will only be backing up files on the win2k3 server - just remember that to restore it, you will need to restore the backup 2 disk files first with 8.6, then use 9.0 to restore the files you need.
2. 8.6 is not a supported backup exec version for backing up windows 2003 - only 9.0 4454 and above is.
What goes to paused every night? the tape devices? wouldnt it be better to troubleshoot and fix this problem?
Lyon