Bumping this thread back from the dead for anyone who is curious about doing what I propose in the OP. I ended up buying a new MRF-260 off of ebay, and I put it under my couch pointing at my HT stack. I just use the IR blaster to send IR commands to my stack. It worked FLAWLESSLY the very first time I set it up! There's zero lag, and I can finally use my remote without pointing. The only time this setup might be a problem is if someone's foot happens to move all the way over to the very farthest corner of the couch. It's unlikely, but that seems to be the only downside to using just the blaster and at such a distance (i.e. not in the rack itself).

So bottom line: you can use an mrf-260 or mrf-350 this way if you prefer. Down the road when I end up hiding my components, I'll take advantage of the flashers and be done with the front IR blaster. But it's definitely a nice flexible feature that solved an annoying problem for me.