I'd suggest just installing the whole thing, it should make your development easier (that way, even if you turn off SQL Server locally, you'll still have the Management Studio to manage/connect to your remote databases ... very handy unless you like setting up remote desktops or walking between servers).
Here's also a list of installation notes on integrating SQL Server 2005 and Visual Studio which you may find helpful:
http://www.sqlservercentral.com/columnists/drussell/technoteinstallingsqlserver2005andvisualstudio2005.asp
Hope this helps,
Josh Lindenmuth
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