Absolutely it can; at its core its still just a dumb MIDI controller. The 'special' integration with Live is all done at the DAW end of things. Similarly you can use a Launchpad (see my implementation of this here: http://chippanfire.com/software/wac-lp-handler/) completely divorced from Live.

I believe there is a document available from Akai's website that gives the full MIDI implementation for the APC. This should help you get full control of various LEDs direct from Max.

Thanks I thought that might be the case. I have no trouble with using my Launchpad. I just heard something about a 'handshake' being necessary between the APC and Live.

I take it you have to send back messages from Max to change the lighting states of the various APC indicators?