Will this cause any harm? Does it serve any purpose other than tell browsers you have .net installed?
I like this article about changing the header to Pure Evil. Genius!
http://www.iishacks.com/index.php/2009/11/11/remove-x-powered-by-aspnet-http-response-header/
Yes you can remove it,it will not affect anything. All x-headers are custom/non standard and informational only by definition. Browsers ignore them. The only thing it could affect is some kind of custom application that actually uses them for something e.g. a web crawler that gathers statistics on what technology is being used on what website might use the header to determine if a site uses asp.net. They don't actually do anything.
This header (and a few other headers) is not required or used by modern browsers and can safely be removed from the web site configuration in IIS without consequence. Other server-side languages also tend to include a "Powered by..." header that can be safely removed. Here is another article that claims the same thing:
http://www.4guysfromrolla.com/articles/120209-1.aspx
[...]
The Server, X-Powered-By, X-AspNet-Version, and X-AspNetMvc-Version HTTP headers provide no direct benefit and unnecessarily chew up a small amount of bandwidth. Fortunately, these response headers can be removed with some configuration changes.
Here's another post on serverfault that says the same thing with some justification as to a why to remove it.