Hi David,
Yep, but a little tricky.
a. upgrade sql to 2005 and latest sp
b. install crm 4 which will upgrade
c. install latest crm 4 update roll up.
Be sure to have a very good backup of your environment. If the crm 3 to 4 upgrade is not successfully there is NO rollback -- you need to restore from a backup. There are various small gotchas that can happen during the crm 3 to 4 upgrade --
nothing major and most of the issues you can google and find the fix. However, this could cause you to have to restore the 3.0 environment.
Alex Fagundes -
www.PowerObjects.com