Yes, you'll be able to continue straight on with the game from where the (stand-alone) ED left off, and your battle tower and all your equpiment will still be accessable.
BUT - only if you have the (stand-alone) FoV expansion!
DKS (the Dragon Knight Saga) contains both ED and FoV rolled into a single package, but it has been remastered - FoV is basically the same in both versions, but there have been a lot of changes to the game engine (for balancing reasons) as well as to the ED part of the game (quest locations, item placements, layouts of flying fortresses and anti-dragon barriers etc).
So ED + FoV save games are NOT compatible with DKS - if you buy DKS you will have to start again. You may already know this, but you'd be amazed how many people on these forums ask why their ED save games won't work with DKS.
Finally, there is a very large patch available for the PC version that will upgrade ED+FoV to match DKS, but if you apply this patch, you will loose all your save games. The patch is not available on the Xbox (too large for the Live marketplace).
