Yeah, it takes SD. I've got the Sandisk Extreme III and it does it beautifully, get a burst of about 5 18.1MP JPG + RAW in a row (or infinite lower res, hit 80 and couldn't be bothered testing further).
Is very nice
Keep in mind I'm VERY amateur at the moment, but see my flickr for some shots it's taken:
http://www.flickr.com/photos/owenh