My wife accidentally shut the smart off while I was driving on the Interstate (don't mess with/bump the key while driving!), so I know that the car was still controllable and I was easily able to coast/steer to the breakdown lane with everything off. I turned the ignition to off and then restarted the car to keep going. I don't have power steering, but even with power assisted steering, no manufacturer would make a car that was undrivable if a power assist system failed - it's not 'steer by wire'. It may be harder to steer, but you'll still be able to easily control a lightweight like the smart. Larger vehicles may be a bit more of a chore without power assisted steering.
Although my above experience tells me you can just shut it off, I'd say since the smart throttle and clutch are electronically controlled, no damage should occur to the engine or clutch if you shifted into neutral and coasted to the side of the road while the engine is racing. The RPM limiter will prevent damage.
I've also shifted the trans into neutral at highway speeds while coasting downhill (just to try it out, not a normal practice). Again, no fuss, no muss.
By the way, whoever said you have to go through the gears sequentially, that's not necessarily true. In manual mode, you can rapidly click the upshift/downshift paddles to skip gears. Of course, the car will determine whether the gear you're asking for is legit for the speed/conditions. I routinely drop two gears in a downshift (4-2 or 5-3) or skip a gear upshifting (3 - 5).
For the record, if you are driving at higher speeds (such as freeway speeds) and you have your foot on the gas, and keep your foot on the gas, and than hit the brakes, it DOES kill the throttle and you have to let your foot off the gas and put it on again for it to give the car throttle again.
I have tried this, and from what I've read, very common in most German cars with drive by wire.