The short answer: Heck, yeah!
The long answer: For the love of God, don’t try it in production yet. SQL Server 2005 hasn’t shipped. But as we’ve been testing our beta code for WSS Service Pack 2, due out later this year, we’ve been testing it against SQL Server 2005 betas, and it appears to work just fine. Our plan is to support SQL Server 2005 as a data store for the current shipping version of WSS if Service Pack 2 is applied. Circumstances could force us to change those plans, but those are the plans.
I don’t yet know for certain if we’ll be able to say the same for Microsoft Office SharePoint Portal Server 2003. I’ll tell you as soon as I get a ruling on it.
The next releases of SPS and WSS will both work with either SQL Server 2005 or SQL Server 2000. We’re not going to make you upgrade everything in your server room. That’d be mean. We’re not mean. Well, maybe a little: there may be a few features in SPS, I believe, that will only activate if you have access to a copy of SQL Server 2005. But that’d be about it. SQL Server 2005 is great, and you should upgrade to it, but we won’t force you to do it against your will.
Heck, for that matter, if you haven’t heard it yet, the next version of Windows SharePoint Services will sitll run on Windows Server 2003. Ditto SharePoint Portal Server.