Adafruit has a kit called i2c / SPI character LCD backpack to manage a LCD via i2c, Adafruit sells it for 5V LCD, the MCP23008 is said to operate from 1.8 to 5.5v, so it should work.
In fact it works very well as you can see with a 3.3V lcd from sparkfun.
So it can play with an Arduino FIO or a Chumby hacker board wich are 3.3V based.
