If you do a fresh install of Lion or need to re-install Microsoft Office 2008 at a future time, users that have an original DVD version 12.0.0 of Microsoft Office 2008 can install on Lion, but will need to do an additional step after installing from the DVD. Until this step is complete, Office 2008 cannot see any future updates. If you have Office 2008 v12.1.0 or later there are no special instructions.
See this article for compatibility issues with Lion: Microsoft announces Lion compatibility for Office for Mac. It’s possible that Microsoft will issue a future updater to fix these issues. Always set the Microsoft AutoUpdater to check for updaters automatically. They will not install without your input, but you will get the announcement to alert you to any future update.