Q: Can a SQL 2008 Central Management Server manage SQL 2005 instances? What about SQL 2000?

A: Yes, it can absolutely manage both SQL 2005 and SQL 2000 instances, and can in fact send multi-server queries out to all of them, assuming the queries are valid for all instances, e.g. SQL 2000 servers will obviously not understand a query against sys.databases... Similarly, policies can also be applied across versions, assuming the properties being set are valid for all instances.

For your reference, Kimberly Tripp has a good post highlighting some of the cooler features: http://www.sqlskills.com/BLOGS/KIMBERLY/post/SQL-Server-2008-Central-Management-Servers-have-you-seen-these.aspx