Can I work while upgrading?

I'd say no. The upgrader itself says you shouldn't do work while upgrading a system.

With that being said, I've done all sorts of things - normal word processing, compiling things (that was stupid) and web browsing (just to name a few), the only thing that has given me problems has been compiling things while doing an upgrade.

However, to be on the safe side, don't do it.

It's just like doing your regular updates. You can keep working but might have to restart a few times. Better still, just to remain safe, make a backup of all the work you have done and also all the work you'll be doing during the updates frequently.

When you upgrade & after backing up your current data, you'll see a status window showing the steps of the upgrade, labelled 'distribution upgrade' or something like that. In that window, Ubuntu will check off each step of progress as they are completed:

Preparing to upgrade

Getting new packages

Installing the upgrades

Cleaning up

Restarting the computer

It is near the "Restarting the Computer" phase that Ubuntu wil reboot into the 11.10 release & all unsaved data will be lost.

I would personally wait until you have a a spare hour or two to upgrade to prevent any possible loss of data or interruption from work.