Yeah, this might work
Not sure how he is going to pull off the distinctive voice, 'tache and teeth. Freddie was always very camp (and tongue-in-cheek) in his interviews so a toned down Bruno would be the way to go. Sacha is a clever man (especially in his Ali G work) so he knows how to pull off a character.
The band always said they were surprised that their popularity declined once Freddie came out (and the "I want to break free" video was a little too much for some) - it was hardly a secret in the music and calling your band "Queen" was a bit of a giveaway. Hopefully the movie does the man and the music justice.
Have they picked a Brian May yet?