skykuhl
Yes this is all possible.
I have a PDC on which I installed SQL 2005 Express
for our AVG Anti Virus Database.
Last year, I installed SQL 2008 Express on the PDC
for a small Time Study Database/Program
( I know it's not recommended but our company
does not like to spend a while lot on I.T.)
and did exactly what your being asked to do.
I unistalled the SQL 2005 Express Tools (Management Studio etc.)
and when the SQL 2008 Express was finished I just connected
to the AVG database.
Now I can manage both through the SQL 2008 Express Management Studio.
Hope this helps.