Yes it can but maybe won't give you all you want...at least I haven't found a way for it to yet.
I'm did the 3.1.2 Blackra1n jailbreak, instaled Cydia then installed ScreenSplitr... (google it - I'm too new to post links!)
Works a treat, as the video on pageScreenSpltr page shows, but with a few restrictions. It's probably only sending video at around 5-10 frames/sec, so renders the Sky idea pretty useless as it's almost unwatchable, and doesn't switch the screen to widescreen when you rotate the phone.
Maybe there's a better solution out there.......