Hello.
1. VM Invoice defaultly does not disable VM e-mails or native invoices. Here is answer how to do that:
www.artio.net/faqs/vm-invoice/how-to-dis...e-mails-and-invoices
2. Yes, we offer fully customizable HTML template.
3. We try to maintain backward compatibility for older versions of VirtueMart, but it is not 100% guaranted. With 2.0.22 it will probably work, but may happen slight unexpected errors. We can fix that for you, if you encounter them. But it is recommanded to use always newest version of VM.