Jerry Hung (3/30/2009)
Yes, you need to upgrade to SSMS 2008 to connect to SQL 2008
SQL 2005 SSMS cannot connect to SQL 2008
Not quite true - you can connect to SQL Server 2008 using the 2005 tools if you have upgrade to SP3. I think the was a CU before SP3 that would allow this - but not sure exactly which one.
However, I would recommend installing the 2008 tools anyways as side-by-side (don't upgrade existing tools). That way, you can use the 2008 tools to do everything you need to against your 2008 instances and 2005 instances - and open the 2005 tools if you find you need something specific that the 2008 tools don't do (e.g. SSIS or SSRS).