That sounds like a downgrade but still an upgrade, and it also sounds like something I would consider not doing even if it was supported.
Edit I tried to upgrade SQL 2008 Standard to SQL 2008 R2 Express and got the following error:
FeatureUpgradeMatrixCheck - Checks whether the specified feature meets SQL Server 2008 R2 upgrade requirements. The specified edition upgrade is not supported. For information about supported upgrade paths, see the SQL Server 2008 R2 version and edition upgrade matrix in Books Online.
If you are going in production with this, I would uninstall first: