Yes. Blanco inherits and overrides base, so if your theme inherits blanco, you can override things defined in blanco and base.

The original post mentions the example theme:

The source package for the theme is provided as well. It includes an application which checks whether Theme settings is installed and if not, asks the user whether to install it from the Store, which of course doesn't work anymore since the application has been removed from the Store. There's also a source package which doesn't include the checker application.

Refer to the existing themes (blanco, mostly) to see where to put which files and what the modifiable items are. Most icons are in themename/meegotouch/icons and library/application specific styles in themename/meegotouch/binaryname/style. Theme wide constants are in themename/meegotouch/constants.ini.

It should be noted that if there's a problem with a CSS file the application probably won't start. This means that if you break a CSS file needed by a system application (like the home screen) the system application won't start and the device may go to an unrecoverable reboot loop. It's a good idea to do theme development on a single custom application that isn't critical for the system OR to be ready to flash the device when things go wrong.