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Is it possible to use any application while it is being updated from the Mac App Store?

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during the download yes, during the install no. wondering why are you asking anyway. –  Buscar웃 Apr 19 '13 at 12:53
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Under System Preferences / Software Update you can choose Automatically check for updates which will enable the Download newly available updates in the background option.

This is quite self-explanatory. It will just download the update, letting you use the application while the download is active, and when the download is complete, you'll be prompted, through Notification Center, to Install the update.

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that only work for the system updates, not for any particular application updates e.g; xCode etc. –  itsaboutcode Apr 19 '13 at 12:13
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It should, as it says Software update keeps OS X and apps from the Mac App Store up to date. –  Thecafremo Apr 19 '13 at 13:05
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