Possible pitfalls of condensing 2 SQL Server instances into 1
I believe consolidation like you are planning to do is a good thing.  Depending on how the linked servers are queried, you may find a huge jump in performance (cross server joins are usually quite horrible when compared to cross database joins on the same server).

The downside is that your entire system is now sitting on one machine.  When this machine is down, all your apps are down.

Here is what I suggest you do to prepare:

Run the SQL Server Upgrade Advisor against each database.  It will tell you of any incompatible code that may exist (e.g. "*=" join syntax, no longer supported).

Identify DTS packages running against the old systems.  DTS is no longer supported.  You will have to rewrite them using SSIS.

Make sure the new system is powerful enough to handle the workoad.