For all intents and purposes, MSDE and SQL Server 7.0/2000 are the same thing (depending on the version of MSDE or course). If you already have SQL Server 7.0/2000 installed, I don't see any reason to install MSDE.

If you want to install only the SEM and not the full SQL Server product, choose the option in the setup for Only Client Utilities.

BTW, you might want to check the ELU for SQL Server. I'm not sure that you would be able to install the SEM to only use with MSDE.

-Mike