Will SQL Server 2000 be able to use indexes in a view over a union of a view across linked servers?

Without knowing more details about your setup, I think your preference should be to leave the data for the two systems in place regardless of whether queries through linked servers end up using indexes. The way you have things set up sounds reasonable given the circumstance. However, I would think since you know that you need to combine the two data sets, I'd consider migrating the data from one server to the other, provided the one server can handle both transaction loads.

This should provide better performance overall for your queries I would think. Again, though, it would greatly depend on what your server and network infrastructure is like.