I've used that code a few times, so it should do the trick.
The promo code still works. There were a few threads about the whole promo code system being down, but there aren't any current problems that I'm aware of.
If you mean can it replace a $50 code that was already used, then I don't believe you can. Once you're referred by someone, or use a code, that's pretty much it. The good news is that you can use your referral link and/or promo codes to refer people and make that money back in no time.
Save up to $96 at Dreamhost with the 96DOLLARSOFF promo code.