You don't need to install MapWindow6. You only need to make a reference to the MapWindow.dll in the Binaries folder of the HydroDesktop source code. Then set the build output path of your plug-in the hydrodesktop\Binaries\Plugins\[your plugin name] folder.
Yes, it's recommended to set the 'Copy Local' property of MapWindow.dll to false for plug-ins.
An alternative approach is to download the MapWindow 6 source code and binaries from the MapWindow repository (http://svn.mapwindow.org/svnroot/MapWindow6Dev/)
Please let me know if you have any other questions.
We are currently in the process of writing a more HydroDesktop - specific plug-in developer documentation. This will include examples how to call WaterOneFlow web services and how to access the HydroDesktop databases. This will be posted to the website by