I know a guy here in my town that uses both a piezo and a magnetic pickup on his acoustic guitar (Gibson IIRC), with separate outputs. The signal from the pickup goes through an overdrive pedal. He gets really awesome sounds with that combination!

It sounds like there's two guitarists on stage. I haven't noticed any feedback problems at any of his gigs. I don't know exactly why, but I think part of it is because he uses only a slight overdrive. A heavier distortion would very likely cause more problems with this.