Due to feature changes between Windows Server 2003 and Windows Server 2008, there is no support for a rolling in-place upgrade.  There is support for an in-place migration.  During a discussion last week on Server 2008, a question came up regarding the process.

The difference is in a migration there is some down time.  You have two options, to replace one node with Server 2008, migrate settings and shift over services and migrate the other node, or migrate settings from one cluster to another with multiple nodes already in place for each cluster.

The details of this operation are provided in the following TechNet articles:

Overview - http://technet2.microsoft.com/windowsserver2008/en/library/6820ae3f-1ecc-43fd-8a76-fe8c2125cfe61033.mspx?mfr=true

In-place migration of two-node cluster - http://technet2.microsoft.com/windowsserver2008/en/library/6820ae3f-1ecc-43fd-8a76-fe8c2125cfe61033.mspx?mfr=true

Migrating with multiple nodes - http://technet2.microsoft.com/windowsserver2008/en/library/d20951ed-a8f7-4ff8-9943-4a3a567f6c6a1033.mspx?mfr=true