In general, it seems like a good idea.

1999 Draft
#5 pick Jon Bender acquired for Antonio Davis. Bender was a walking injury who never panned out, but the #5 pick could also have gotten the Pacers Shawn Marion, Andre Miller, Rip Hamilton, Andrei Kirilenko or Ron Artest.
2001 Draft
#2 Tyson Chandler for Elton Brand. #3 (Pau Gasol) for Shareef Abdur-Rahim. Also on the board were Richard Jefferson, Zach Randolph and Joe Johnson.
2002 Draft#8 Nene (and Marcus Camby!) for Antonio McDyess. Amare, Caron Butler, and Tayshaun Prince are taken later. Carlos Boozer lasts until round 2.
2004 Draft#7 Luol Deng for 2005 1st round pick (#21) and $3M cash. Andre Iguodala, Andris Biedrins, Al Jefferson, Josh Smith follow.
2005 Draft#3 Deron Williams for #6 Martell Webster, #27Linas Kleiza and a protected 2006 pick. Chris Paul went #4, Andrew Bynum went #10.
2006 Draft#7 Randy Foye (traded with cash in another pre-arranged deal with Minnesota for #6, Brandon Roy) to Portland for Theo Ratliff and Sebastian Telfair, and for taking Raef LaFrentz and Dan Dickau's worse contracts.
#8 Rudy Gay to Memphis with Stromile Swift for Shane Battier. Still on the board are Thabo Sefolosha, Ronnie Brewer and Rajon Rondo.
2007 Draft#5 Jeff Green acquired by Seattle with Delonte West and Wally Sczerbiak for Ray Allen and 2nd round pick. Yi Jianlan, Joakim Noah, Thaddeus Young, etc still on the board.

When I look at that list, I think
1. You have to know who the good players in the draft are going to be.
2. If you know that, and someone is willing to trade you a high pick for your existing player, or for some sort of future consideration, you ought to move on it.

The only trades I see somewhat working out in favor of the team that traded for the existing player were the Clippers for Brand and the Celtics for Allen. Allen is old, but combined with KG his immediate impact makes some sense. Brand was just good, whereas Chandler came along very slowly. But that's sort of a different consideration. On the prospective talent side of things, I'm pretty confident a bad team would be better going forward with a young player. Trading Brand for Gasol wouldn't have looked awful at all. The issue there, at worst, was bad use of the pick once it was gotten.

So I say, if you can trade up, do it. Chances are the other team is overrating the guy you're giving up and underrating what's available in the draft.