Totally. You can buy anything in the iTunes store, as long as you have enough money left. (Example: Don't try to buy an app when you have $0 dollars left *DUH*). I would reccomend the free apps, though. A lot more cost effective.
With the gift card, you can get to preview applications that you have never seen before. You can also watch hot high quality streaming videos of applications in the application store with the card as well. You can view and check out the features of an application using it too.