IIS 7.0 Application Pool Recycling log files

Yes, that should be ok assuming you also use Private Memory Limit = 0. There are still reasons an AppPool could recycle, such as when adding a new Global Module, it will require to be recycled so configuration changes take effect, but you can also disable that using the "Disable Recycling on Configuratoin Changes".

Finally if you are running ASP.NET you should consider that still AppDomains will recycle when changes in config (such as web.config) happen. But that should not affect the AppPool per'se only the ASP.NET applications running in it (such as Session State), but again it depends on why you ask this question if this is important or not.

No.

By default, the WWW service establishes an overlapped recycle, in which the worker process that is to be terminated is kept running until after a new worker process is started.

This is from the Documentation for IIS6 and I am sure it applies for IIS7.

If your web service requests are long-running, you might consider increasing the shutdown timeout.