Moving C:\Users to another partition on Windows Server 2008 Standard

Yes it is possible. See this kb article- Relocation of the Users directory and the ProgramData directory. The best way to do it is during the install. Manually moving it after the system is installed will probably not be supported by Microsoft. If you don't follow the recommended method for relocating the folder you can have problems. Do make sure you read the note about applying the service packs which address some issues with relocated folders.

Microsoft's official instructions while "official", I have found that method to actual break some applications which assume where the Users directory is instead of looking it up. As Microsoft states in the above article, it may even not work on upgrade of Windows.

While "unofficial", I have found it much better to create a symbolic link from the normal Users directory location to the new drive where I want to host things. This makes it so it will always "look" like its in the right spot, but the data will be in another spot. The process to set this up is not horrible, but its not easy.

This is what I've done:

Boot the computer with a Windows Installation CD.
Choose "Repair my Installation" and then choose "Command Prompt"
Navigate to different drive letters (e.g. c:, d:, e:, f:, etc) to figure out where your current Users directory is and where you'd like to move relative to how the Windows boot mapped the drives.
Copy your Users directory from where it currently is to where it should be, e.g.:

xcopy /h /s /E /B /Y /V /C /K /X F:\Users D:\Users
Move your current Users directory to another name such as Users2:

move Users User2
Create a symbolic link from where Users was, to where you copied the folder.

mklink /J Users D:\Users
Reboot and validate that everything is proper (e.g. Create a new file in your Documents, and validate it shows on the other drive / location)
Delete the copy of the Users2 Directory.