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SQL 2008 upgrade from 2005 on SBS 2003

We run SBS 2003 Premium with SQL 2005 (Workgroup edition of course). One of the application major upgrade requires SQL 2008 (the express or standard). Can that be installed side by side with SQL 2005 or is there an upgrade path to accomplish and not break everything else?
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However, after you install sql2008. It is not compatible with
The SQL 2005 management studio. You need to remove the old management studio and install the 2008 management tools from the Internet or the SQL disk for 2008. Maybe you don't need the management studio. But if  the old one is there you could have a problem
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thx, can the 2008  management studio manage the 2005 DBs as well?
Yes, ssms 2008 can manage 2008, 2005 and 2000