we are using 7204VXR for our internet edge router. we want to set up snmp for monitoring purpose for this device. is it a good practice to set/open snmp on our internet router?
Sure. You will need to be able to manage this device. However, you will want to make sure you secure SNMP properly. That will involve adding an ACL to your SNMP community strings or SNMPv3 credentials, and maybe even establishing SNMP views.
There is a good article on securing SNMP at http://www.cisco.com/en/US/tech/tk648/tk362/technologies_tech_note09186a0080094489.shtml . This article covers SNMPv3 as well as adding ACLs to prevent unauthorized hosts from polling your devices.