A. There are two upgrade paths available to move from SQL Server 2000 or SQL Server 2005 to SQL Server 2008. An in-place upgrade is fully supported. In an in-place upgrade, the SQL Server 2008 binaries are installed on an existing SQL Server installation. You stop the older SQL service, point the services to the new SQL Server 2008 binaries, and then upgrade the databases. (This is a simplistic overview. For more on upgrading to SQL Server 2008, see this article.) You must upgrade to the same architecture version of SQL Server—you can't move from 32-bit to 64-bit.
The alternative is a side-by-side migration, which is a more manual process where a second instance of SQL Server is created running SQL Server 2008. This second instance can be on the same box as the SQL Server 2000 or 2005 instance, or you can use a new server. The data is copied from the legacy SQL Server instance using the copy database wizard, a backup/restore, or a detach/attach operation. Once testing is completed on the new server, you can move applications and services to the new instance and retire the old one. If you use side-by-side migration, you can change the SQL Server's architecture as part of the migration.
While the in-place upgrade is generally simpler, you have less control and granularity of database upgrade scope and very little rollback capability in the event of a problem. A side-by-side migration gives you a lot of control and testing capability, but is more complex and you'll generally need additional hardware.
No matter which approach you take, make sure you use the SQL Server 2008 Upgrade Advisor from Microsoft to identify any potential problems before you do the upgrade.
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