I did just what you're thinking about. FO2VD on hard was a lot of fun for me. Does it work with other mods though? I'm not sure, but I don't think it would. I know very little about modding fallout 2, but I believe for the HP increases of all the critters in the game to show up, all the maps had to be recompiled with the modified protos. If that's the case, then any mod which attaches scripts to or modifies maps in any way will either not work or overwrite the very difficult mod.
Random thought: I always thought it would be awesome to be able to select a global (except PC) HP modifier. Unfortunately playing fo2 just isn't hard anymore. I know Glovz's ammo mod is working on this issue, but I would still love to be able play Killap's RP with all creatures getting this mod's HP buffs.