we have sharepoint on a dev computer, but I was wandering if I install it on my local machine will sharepoint overtake iis? will there be any limitations when doing other web applications development?
The short answer is: "No, it does not impact your ability to create other web applications which are NOT targetting SharePoint."
You can still create ASP.NET Applications not targetting the SharePoint AS LONG AS you work with a new physical IIS web site which is not used by SharePoint.
You can also create ASP.NET MVC application as long as above condition is satisfied.
When you create a new Web Application from SharePoint Central Admin, it creates a new IIS web site and modifies the web.config heavily and changes the request pipeline.
But when you create a web site in IIS youself and target that web site as a regular ASP.NET web application, SharePoint will not get in your way.
SharePoint would only hinder you from a system resources aspect. SharePoint is a BEAST. All other parts of a SharePoint installation are configurable by you.
SharePoint will create IIS sites and Application Pools for you, but you get to choose things like port number, names, etc (most all of which should be configured through SharePoint central admin, not IIS). If you need something available on the same port as SharePoint, jump into IIS manager and use host headers or even just turn off the Sites / App Pools altogether.