Yes, as RM have heavily customised GPOs.
1. Do I need to re-create GPO from scratch? (Already done this, just not enabled at the moment)
It's not just the RM tools in Add/Remove Programs you need to worry about. RM also heavily customise the registry. You're better off installing XP SP3 or Windows 7 SP1 on all existing machines. It would certainly make managing the whole thing better.
2. All client computers in the network have an RM login screen, what is the fastest and safest way to remove this?
Do you really need DFS? It doesn't sound that big a network to justify the need.
How do you go about mapping normal network shares into DFS shares?
There's the Print Migrator 3.1 which works with 2003 Server, but not 2008 R2. In 2008 R2, the Print Management tool has a 'built in' version of Print Migrator 3.1, so you can add the existing 2003 server as a print server, then export/import the printers as required.
And with printers, is there an easier way than just installing all the printers on the new server?