How much water is needed for boil?

I have made two recipes to date, both from extract. I guess my question is regarding each recipe and the amount of water needed to boil. The AHS recipe (Belgium Pale ale) required 3.5 gal and had grains to steep. The second recipe was from Brewer's best (heffe) and it called for 2 gallons of water for the boil. If I choose to boil with more water, 4 to 5 gallons, will this affect the finish product positively or negatively?

I purchased a 7 gal. brew pot and a an immersion chiller because I read that it was better do full boils and also have room for boil-over prevention. I wish that I would have read some recipe requirements prior to purchasing the boil pot as I could have saved some money on a smaller one that fits on my stove top. By the way, the Pale Ale is in the bottle for one week and the heffe is in the second week in a primary, I still have not drank one of my own homebrews.

Doing full boils is nice in the the whole volume is all boiled together instead of just pouring water on top. But if you buy a kit designed for a 2 gallon boil, and just throw in your full amount, it will throw off you hops. Plus if you want a full 5 gallons into fermenter, then you'll want to boil 6-7 gallons depending on boil off rate, so your 7 gallon pot may not be big enough. If it is, you'l be watching it like a hawk for boil overs.

I am still a noob, but I have done a bit of research on the subject and I have decided to stick with smaller boils for now, until I get into all grain brewing. A 2.5-3.5 gallon partial mash will still be damn good. I don't know enough about hop ratios and such to dive in to full boils quite yet. I am on batch #8 and everything has been so good, I don't see any reason to make the leap quite yet.