Yes it's possible - you have to cold-set (aka bend) the rear stays to make a wider gap (it's about 120mm ish stock) to accept wider hub axle; this sounds scary but steel is inherently forgiving and I can testify to its success.
The other caveat if you're going to run a derailleur hub is the length of the stays and the angle at which they join the seat-tube - you may well find the smallest gear on the cassette will be too close to the stays and rub/jab/drop chains often. Less of a problem with a hub gear but something to be aware of. Some twenty owners have actually ground and fillet-welded the inner edge of the right-hand chain-stay to avoid this problem but that's definitely an expert fix and not for the average beginner...
I did indeed add a 3x7 SRAM Dual Drive to my Raleigh. You do have to cold set it and you have to watch the chain line. Depending on the gearing you want, you can use a double chainring with the inner (smaller) chainring and you will have an easier time with the chainline issue. It will of course give you a smaller high gear. I had my LBS guy carve out and rebuild one of my seat stays in order to get clearance.
'69 Carlton Team Pro, '74 Raleigh Pro, '74 Motobecane Grand Jubilee, '64 Royal Enfield Revelation, '70 Raleigh Twenty, 2005 Carrera Delfino, 2003 Moser M81
My experience with modifying the rear triangle leads me to recommend extreme caution.
The chainstays are tiny. A cold set will work, but for how long? The hidden
stress point or tube cracking may first appear near the rightside chainstay bridge. My frame failed at this
point, but it was an accelerated failure due to running a 7/8 speed narrow chain on a single
speed cog that preferred a chain with more width. Since I had no jockey wheels to accomodate
any chain slack, each time the chain tried to ride up on the cog, it popped. Until I folded it on driveside during an uphill sprint. I had not realized that the occasional popping was sending damaging stresses through the frame..... It's all repaired now and I'm back in action, but be careful what you do back there. I've chosen to keep the chainline in tight on the frame to reduce bending moments. I've also added a deraillleur mainly to accommodate some chainslack and remove trauma from the driveline. I'm using a 5 speed corncob and 117mm spacing.
Sorry, I've been busy with work and haven't been able to check the forums as much. Here is a link to the work my LBS did on my bike. http://www.thebikestand.com/raleigh-folder.html
You'll see the bonehead move I made, as well. Hey, I was a novice at the time and just wanted to get the thing together.
As far as cold setting goes, I think you have to make your own decision. While Guy's situation was unfortunate, people have been cold setting rear triangles for as long as there was a good reason to do so. I guess you just have to do a routine inspection every once in while as they say, you can't live your life scared. Either cold set it or don't, and don't worry about it after you've made your decision.