Publish to folder, upload with FTP
Yes, you can publish to a folder, then upload to your web host with FTP. You will need an FTP program to do that. I got ForkLift, which seems to work pretty well. There may be freeware that does the same function for you.
The bigger problem with iWeb for me is that you cannot save projects. If you have multiple web sites, that is a problem. The assumption seems to be that you have only your .Mac site and therefore only need to maintain one web site. If there is a work around for this, I haven't found it yet.
Aloha,
Bob