Can I replace sugar with honey in baking?
Yes, it can be. The general rule of thumb is to use half the amount of honey as you would cane sugar, reduce the other liquids by 1/4 cup, and add one 1/2 teaspoon of baking soda for every cup of honey used. I've done this with a couple different muffin recipes and had them turn out fine.

I've also combined honey with sugar substitutes (1:4 ratio) to use in place of brown sugar when baking for my diabetic father. When I do this, I don't eliminate any other liquids as the sugar substitutes tend to dry out baked goods.