I have used the PCB8574 extensively and I see no reason why it won't work.

It's a little convoluted and will be a little slow because you'll have to send an entire message to the PCF8574 just to wiggle one of it's output pins, etc.

You may want to consider the EDE702 chip, can't remember the supplier, do Google search) it's basically a smart LCD serial interface chip for just a few bucks. I think they're also available at JDR and/or Jameco.