Yes, but make sure that ALL of your servers are SQL 2008. If you have development, test, QA or disaster recovery servers, all of them will need to be 2008, since 2005 servers won't be able to restore a 2008 backup.
To prevent the lost-login problem that Ilya mentioned, follow the steps in this knowledge base article. SP_Help_Revlogin will script out your logins, and you can apply that script on the new server. Presto, all your logins are back with the same SIDs and everything.
http://support.microsoft.com/kb/246133
(And just for future reference, this is how we upgraded StackOverflow last night, heh.)
http://twitter.com/SuperDalgas/status/976719756