From what I have read it is possible as long as you have the latest bios installed. I know that I can do it on my T60p. I would check the thinkpads.com forums. They are an excellent source for any thinkpad info. They are at http://forum.thinkpads.com
As everyone else said, install the lastest bios and your good. Make sure as you take it apart, you remember/label where everything went. Nothing like having a bunch of parts sitting infront of you and trying to get them to all go back together. Definitely easier then replacing the motherboard though.
I would like to upgrade to a newer nice 4MB cache core 2 I am very handy, but just wanted to make sure the chip would work. I love this laptop Z61T and I love it Just affraid it might BURN up