Do you mean that you have 2 domain controllers (DCs) or do you have two domains in an AD forest.
If you have two DCs in a single domain forest you only have to raise the functional level once for the domain then the forest. (you don't need to do it on every DC)
If you have two domains you need to raise the domain functional level in each domain then the forest functional level
http://technet.microsoft.com/en-us/library/understanding-active-directory-functional-levels(WS.10).aspx (nice find by Brian Desmond)
You cannot set the domain functional level to a value that is lower than the forest functional level, but you can set it to a value that is equal to or higher than the forest functional level.
As far as will it break anything I can't say 100% in your environment but it is highly unlikely and as close to 100% as I can get without being 100% :)
Thanks
Mike
