1. Depends on your system, with the GF2's, the 12.41's are good baseline drivers, almost guarenteed to work without issues. The 23.11's are somewhat faster.
2.
http://www.guru3d.com/files/3. You don't have to but you should, I havn't had any problems installing over different driver sets on win2k, but it can't hurt(And with win98/me you definitly should delete them) Detonator destroyer is on the url above.
When it comes down to it though, drivers can depend an awefull lot on your system, so for best performance, youll want to do a benchmark with various different driver versions. Also, especially with the nvidia cards and drivers, the newest version isn't always the best. Newer versions are optimized for the latest nvidia card, and it often hurts the older cards.