Well, from a stability standpoint.... you can sail with the CB up. But you will not make very good progress to windward with out the Cb at least partway down, also steering may be a bit hard since the CB helps a lot in directional control. Some of the larger K/CB models will sail with the CB fully up, but again..... leeway will be much more than with the Cb down and steering will be less precise.
When sailing off the wind, ie: reaching or running, the Cb should be raised partway, and on a run it "may" be OK to raise it all the way....... but even then the boat will steer better with the CB partway down. Experiment to determine just how much Cb need to be down for best handling on different points of sail. CB should be raised slightly even when beating if you are using only the main sail in stronger winds, this will help to better balance the helm and reduce weather helm.