<p>I know MSDE is no longer supported on Vista, is this also the case for Windows Server 2008?</p>

The status is the same for Vista and all OS after Vista, which includes both Windows 2008 and Windows 7.
I do not know if you can somehow "make it work", but you will not get any Support from Microsoft.
Edit: Source is
here
, the two important bits:
MSDE 2000 will exit mainstream support on 4/8/2008 and no new deployment agreements will be allowed after June 30, 2007.
and
Yes, MSDE will be supported through the end of it's life cycle on the operating systems it is currently designed to run on.
(That was up to Windows XP and 2003 Server)