I am using kivy on windows 7 . You can use option 1 . it wont damage your current python 2.7 because you can just change the path of environment to the python interpreter which comes with kivy .
in case you need to turn back to your older python installed just change the environment variables .
Ino order to add third party libraries , most of them are already installed in kivy . for others you can find them on kivy.org :)
If you need to use for example pyQt4 or similar library you need to use different interpreter . I am also doing same stuff .In my case , I use pycharm and keep different configuration (i.e. python interpreter) for different programs .