Visual Studio - Is it possible to install both VS 2005 and VS 2008 on same machine?

Yes, it's possible to have both on same machine.

If you have multiple version of Visual Studio on your system, to open a solution, right click the file and select "Open With" from the context menu, then you see "Microsoft Visual Studio Version Selector", if you use it, the solution automatically opens with the correct version (2005 or 2008) and it's depend on the VS version which you created your solution.

Visual Studio - Is it possible to install both VS 2005 and VS 2008 on same machine?