To clear your doubt, Whenever SQL Server is upgraded to a higher version it means that the Database Engine gets upgraded to new version.
From the user point of view nothing gets changed but only the version of the SQL Server. If anyone has a question on why they were not able to connect to SQL 2005 you can tell that the version has now upgraded to SQL 2008. And they will have the same level of access that they have in the earlier versions.
Hope this clarifies your doubt
Note: As a check ask your application users to try connecting to the SQL server. They shouldn't have any problems.