Officially (going by the canon laid out in I, Partridge) it's all in the same universe as The Day Today, the mind boggles.
In my mind, The Day Today that exists in the KMKY/IAP/MMM/IP etc Alan Partridge world is a more grounded in reality news show, i.e. no Bomb Dogs or reanimated corpses acting as executioners being reported on. The way the Day Today is described in the book, from what I recall, has Alan at standard, mundane production meeting with Chris Morris, Michael O'Hanrahan etc, and the way the scene is laid out it gives the impression that they aren't the same heightened, exaggerated characters
[1] they are from the TV show, which kind of helps my mind accept this as my own answer. So The Day Today that we seen on TV isn't in the same universe
[2] as KMKY/IAP etc.
Mental gymnastics, I guess, but it works for me. If in 'I, Partridge' something Day Today level surreal happened or was even referenced, then it would be harder to compartmentalise like that, for me anyway.