Whatknott is correct - we do this all the time for our config changes. The thing to remember is that if you are managing versions such that a user will only get the new version of the smartclient when there's a new version on the server, you'll need to arbitrarily increase the version in the manifest file to get the config changes to download to the user again.
This, of course, can be dangerous depending on how your deployment process versions the app. For us, we use a time-based algorithm, re-setting the version to be the date followed by HHMM (for example, 2008.9.23.1317). This is done in our build/deployment scripts so we can pretty much ensure that we can change the version to 2008.9.23.1318 in the manifest without worrying about another build using that same version.
Anyway, something to think about.