I have tried this out using VS2005 R2 on WHS and installed SBS2003 R2 successfully on WHS, albeit it is a torture on the spare Dell Dimension 2400 (Celeron 2.4GHz with 768mb ram) system. It was slow and length installation, but it works fine.
Perhaps on a much gruntier machine with plenty of ram should perform better.
I also did a test of running VMware Server on SBS2003 R2 system, with WHS as guest. The installation went well and it is running on a slightly more powerful system, with 1.5GB ram to use. I assigned 512mb and 40GB VMware BusLogic SCSI HDD to WHS.
I will discuss more on this on the other topic regarding "WHS inside Virtual PC or WMware?"