Can I use real flowers for cake decorating?

Sure, why not.
Obviously don't use poisonous ones.

I want to use real flowers for cake decorating. Which ones should I stay away from?

This should help

poisonous flowers - Google Search (http://www.google.com/search?hl=en&client=firefox-a&hs=Th6&rls=org.mozilla:en-US:official&channel=s&ei=Jj31S4WZN4OglAfEvaz9Cg&sa=X&oi=spell&resnum=0&ct=result&cd=1&ved=0CCIQBSgA&q=poisonous+flowers&spell=1)

This should give you some ideas: Flowers for Cakes, Cake Decoration, Cake Flowers, Wedding Flowers by Weddingbokay (http://www.weddingbokay.com/Cakes.html)

Its "okay" to do, but generally not recommended because they need water once they're cut. At the best, stick them in at the very last moment and expect that they may drip water or pollen onto the cake.