Theoretically? Sure.
Practically? Absolutely not. Assuming it is pin compatible with the current screens, you would need to rewrite the display drivers for the higher resolution, and somehow deal with games being designed for the smaller screen. Not to mention the physical limitations: you'd have to rebuild the case. It also seems to lack a touch screen.
Why do you want to do this? If this screen is what you want, it seems to me you'd be better off getting a BeagleBoard as the base and working up, rather than taking something complete like a Pandora and hacking things to fit.