It sounds like your dd would probably be fine in the other room. If it were my kids, however, I would worry about the 2 yo trying to climb into the baby's crib, giving her toys that might hurt her, covering her with stuffed animals - essentially all the things that a 2 yo might think is fun when not constantly supervised.
Our dd and ds share a room now which I think is wonderful for all of us. We moved him in there when he was 14 months and she was 3 1/2. Ds had been sleeping in the nursery, not in our room, before that.