Hi Jack,
As a newb just barely ahead of you in this DCG thing, I can look at this from your perspective and see that while the above resources are very helpful, they don't answer ALL of your questions. Especially the "Will it screw up my ...?" ones.
I haven't found any clear answers in the documentation, but I'm going to put my semi-informed speculation here and let the experts take a shot at it.
Will it screw up your BAT install? Not majorly. DCG seems to affect only a limited set of folders concerned with mission and campaign generation, which can be backed up.
Will it screw up the other dynamic campaigns you're playing? Yes. DGEN (the stock dynamic campaign generator) and DCG (the add-on) are like interpreters that generate missions based on their own programming languages. One or the other is running in the background of IL2 when you play. When you install DCG, it replaces the stock DGEN exe file with itself and thus becomes the interpreter for all the dynamic campaigns you are running. If you are running a stock (DGEN) campaign after you've swapped in DCG, it won't interpret the campaign right and will mess it up. So you can only use one dynamic campaign system at a time. Forget about having an IL2 session where you fly a mission from a DGEN dynamic campaign and then one from a DCG dynamic campaign.
If you're in the middle of both a DGEN and a DCG campaign, how do you safely switch between them? I don't know. For sure you have to use the switch in the DCG app that restores DGEN as the dynamic campaign executable, but I don't know what else you have to do in the DCG app or whether you have to also restore the entire DGEN folder that you backed up before you switched on DCG.
Will it screw up your static campaigns? I'm beginning to think so. When you think about it, all campaigns are at least a little bit dynamic inasmuch as they keep track of what your pilot has done, and I'm starting to think it is DGEN that handles that. When I've installed DCG and started a DCG campaign, then played a mission from a static one, it seems to not record and credit my missions properly, and I get wrong mission dates and debriefing screens. Maybe you also have to do -- whatever it is you have to do to switch between DCG and DGEN dynamic campaigns -- to switch between DCG and stock static campaigns.
Hope this helps and also alerts the experts to areas we newbs still find puzzling even after RTFM.
August