Of course! But if you update with Nintendo, YOU GET BRICKED (most of the time).
Go use a guide somewhere on THIS site (they're better)
If you wanna update your wii after softmodding it (messing with the software, not hardware), you will need to use waninkoko's updater (run it through homebrew channel). I think if you have a hardmodded wii (has a modchip), you can update no problem.
One thing you must make sure to do after hacking your wii is to turn off wiiconnect24, or else it will auto detect your hacks and brick you.
Although you CAN update, it's best to downgrade your wii to system menu 3.2 because it gives you more options and stuff.