No, she's not using the nestbox to raise young, she's using it as a roost. Woodpeckers as well as other birds are known to use existing cavities to spend the night in. This is a good reason to leave nestboxes out even after breeding season is over. During long and cold winter nights, having a cavity in which to roost may help birds survive.
My Sweetie enters the box in the early evening and watches what's going on in the yard until dark. The sight of her just peeking out from her little "apartment" is what earned her the name Sweetie.
She sometimes sleeps in in the morning. I have seen her leave the box in the morning a couple times; just a week or so ago it was nearly 8:00am before she started her day, well after other birds had started visiting nearby feeders.
What is a puzzlement is whether this is the same female downy we first witnessed doing this in the fall of 2007. She continued to use the roost through the winter of 2007/08. She used it again in the fall of 2008. This year, we saw her roosting in the box in JULY, oddly, when we were experiencing above average temperatures. She has been regularly roosting in it since and I suspect she'll use it all winter.
It's the same box. A female downy. Same early to bed - late to rise habits. The same behavior of watching the yard activity after claiming her roost for the night.
I guess I'll never know for sure if it's the same bird, but we become used to these uncertainties as observers of birds, don't we?