Is it possible to use an Android phone in "disk mode"?
Absolutely, and it's very easy.  This is the procedure for my Samsung Galaxy S; other phones may be different:


Plug in the USB cable and a USB icon
appears in the notification area at
the top of the screen.
Pull down the
notification and tap "USB
connected". 
Tap "Mount" on the
dialog box that's displayed. 
Two
removable drives show up on my PC;
one for the built-in flash memory,
and one for the expansion SD card.