So I purchased the car on October 2006. Now, after 1 year and 2 months, I barely have 7,000 miles on the car. Manual says to do 1st service at 20,000 miles or after 2 years.

Is it really safe to service the car ONCE in 2 years?
Just not used to such long intervals so wanted to make sure... Thanks!

Yes, it is perfectly safe- take the leap of faith.
Of course, you could change your oil and filter every 10k if you wish- after all, it is your car.