Yes, it is possible.
If I were you, I'd buy some router that would support upgrading to DD-WRT.
I had a similar setup in my last appartment due to a single phone plug working, far from my computer room. I setup a wireless router next to the DSL modem and another one in the computer room, with all the computers on it, so I had only one wireless link.
Most routers have a client mode, even with their default firmware. Setup the one near the modem as access point/router and the other one as a client, connecting to the first one. Wireless G is limit for an HD stream, but enough for compressed SD streams (like DVD or Divx). N should be fine for both. I may have to upgrade my router to an N one, to do the same