Generally yes, but I don't know when to say it's acceptable... that's some more advanced level of syntax. Right now, quickly thinking, I can only imagine it happen when the noun phrase with the demonstrative is the subject: "Pies ten jest bardzo duży". That somehow sounds like from Animal Planet to me. Basically, on the learner's level, better keep to the basic structure here.
Also if you show me some specific examples, we can discuss them :)
"w więzieniu" is still easily pronouncable (at least to a native), there's no need to change it to "we".
"we" is used if the next word starts with W/F and another consonant.
"w Warszawie" (in Warsaw) but "we Wrocławiu" (in Wrocław). "we Francji" (in France) but "w Finlandii" (in Finland)