I shot my first wedding with a 30D, 17-85 lens and 580EX flash, with coverage from 07:00 in the morning through to 21:00 at night, indoors and out. The lens wasn't the best tool for the job but it's all I had and it got the job done. The short answer to your question is "Yes".
However, for a bit more money there is the Tamron 17-50/2.8 lens, which is sharper, distorts less and has a constant f/2.8 aperture throughout the zoom range. The f/2.8 aperture is a big deal for several reasons - if you shoot with manual exposure the exposure does not alter as you zoom the lens; the centre point AF will be more accurate; the viewfinder will be brighter; you will have more control over shallow DOF; you will be able to pull in more ambient background light if you wish. The downside of this lens is less zoom range, no IS and slower, noisier focusing.
For a lot less money there is Canon's 18-55/3.5-5.6 IS lens, which is supposed to have better IQ than the 17-85, keeps the IS and is a little faster at the wide end. You lose the fast, quiet USM focusing and the long end once again, but you save a truckload of cash.
I wouldn't recommend a prime, good as they are, since they lack flexibility for composition if you are working with constraints on space. Also, since "foot zooming" changes perspective it may not be the solution you want to framing varying group sizes of people.
For the specific event you've mentioned I'd recommend the Tamron as the best option for the budget, in terms of IQ and creative flexibility (that f/2.8 aperture helps here). But in the long run the best lens for you depends on what other plans you have for it beyond this event. If you feel you would like a lens that gives you 85mm at the long end, focuses quickly and quietly and has IS then the 17-85 will serve you well. It was the only lens I used for a year, before embarking on a major lens upgrade.
