For a start, Server 2008 = Vista, and Server 2008 R2 = Windows 7.
But yes, while in theory it's very possible (And you've even got things like the Desktop Experience feature) and many applications will work great many will also not. Some applications just don't like Server Operating Systems - whether through a deliberate attempt to distinguish between home and corporate users, or just through incompatibility or security issues.
The problem is, by the time you've server you're 2008 box into a workstation, you may aswell be....using a workstation.
So, I think the bigger question is - what do you think you're going to get better from Server 2008 (or R2) over Windows 7?
The PC is going to be used more like an workstation, almost 24/7 on, 16GB of RAM, some VMs, programming, audio/video entertaining, P2P apps, etc. No gaming. – Nick – 2011-12-01T11:38:04.190
If you're intending to run Hyper V VMs then you will need the server OS. There is no way to run Hyper V VMs in windows 7, unless you choose a VHD as your boot drive (which is not ideal) – Mark Lawrence – 2011-12-01T12:54:20.157