It's possible, that's how we've been using ours until yesterday, with our DSL router (just got myself a 11g router and now bridge the DSL to it). Just leave the WAN port on the SMC open. Configure it to have a static IP on the WAN, and either leave it blank or set it to some random network (like 172.0.0.1) that won't cause any interference with real network traffic. Set the LAN IP to something that won't be assigned by DHCP from the new router, and disable all DHCP, firewall, and other functions, except for the wireless settings. Then plug one LAN port into the new router (using a crossover cable if neither has an uplink port or auto-detect). Now you've got a wireless access point as well as the remaining switch ports on the SMC. The settings like date time, if they can't be manually set, are designed to be picked up via the WAN connection, so any logs of the wireless connections won't have the right date/time.
Incidentally, as long as the phone jacks actually are wired together, you can do phoneline networking. They don't have to actually be connected to the telephone system.