It does, but I would avoid it. I had it installed, and as that wiki reports, it causes repeated crashes when Explorer tries to generate thumbnails of certain types of video files. I uninstalled it a couple of weeks ago, and things have been okay since then.
The latest version of Nero 7 apparently has no such issues.
As for your question, Matt - I think it should be fine to install DX 9.0c. I remember installing some other app that also needed it, and it hasn't caused any issues here.
The DirectX installer first checks what version you have installed and if what you have is a higher version then what it wants to install then the installer quits. That is why when you go ahead with install nothing happens. At no time will a lower version of DirectX overwrite a higher one.
Another thing - I just installed Nero 7 Lite (Micro) with the demo key. It's a custom installer that only installs Nero Burning ROM and Express, including basic Audio/Video support. http://updatepack.nl/
This seems to be exactly what I was looking for.
It didn't install the Sidebar gadget though.