I haven't done it (just have the one DS), but I've read that it's fine. Moms can nurse through the entire pregnancy, but are often sore and milk may dwindle or stop. When the new baby is born, mommy's body makes the milk for the youngest (you know how milk is age-appropriate). There were some articles in New Beginnings the issue before this latest one. (I haven't read the latest one yet to see if there's more there.) I know that breast stimulation can induce contractions, so if mom's worried about pre-term labor it might not be a good idea. I've even seen a maternity-nursing top (the caption read something to the effect, "so you got knocked up before you weaned the first, huh? =) ") LLL has a book called "Adventures in Tandem Nursing" that would probably have information for you.
I've always thought it would be a good idea to tandem nurse. I think it would help the older child adjust to the younger one. "No, you can't nurse any more, but the baby can 24/7." Obviously, that's not what you say to the older one, and I haven't been that road so this is not the voice of experience. My ideas may very well change when I get to that point in my life. That's what I've read and heard. Good luck!