Note that **[You are arguing for an UNSUPPORTED version of sql server][1]**.

Apart from that read below :

>but the DBAs are telling us that Replication in SQL Server 2000 doesn't work and/or that it has a severe performance impact on the source server.

This is completely **False**. Why would T-Rep not work in sql 2000 ? Why would it have a severe performance impact on source server ?

The only impact that I can see is 

 - During the initial snapshot generation as it **locks** the table while the snapshot is generated and if the table is **huge** then it will lock it for longer durations. Imagine this causing blocking or possibly timeouts.
 - when you are replicating the entire database (not only required set of tables/articles) and when you want to reinitialize the replicaiton - meaning new snapshot !
 - When the n/w bandwithd is not good or there are n/w related issues. 

Above holds true even today for sql server 2012 or 2014.

Note that T-Rep on sql 2005 and up has improved a lot, but the argument your DBA has made is baseless. **We even has some legacy applications running on sql 2000 and we use replication heavily and is stable in sql 2000 - no issues at all**.


>if it is true/not true that queries from Stored Procedures or queries called from a Linked Servers will take precedence over other queries (e.g. dynamic queries from a connecting application).

Again completely **baseless** or you might have misunderstood it. Stored procedures can have their plan complied and stored in procedure cache and the plan can be reused.

I don't think you can have priority of the kind you have mentioned.

  [1]: http://blogs.msdn.com/b/sqlreleaseservices/archive/2013/04/08/end-of-extended-lifecycle-support-for-sql-server-2000-service-pack-4.aspx