I would go with the latter, or wired, solution (I assume that you have already rejected the idea of running a plain old RJ45 cable between the 2 devices).
Effectively connect the uplink port of the Netgear to one of the downlink switch ports of the BT hub.
You can also switch off the Netgear firewall (just leave the BT hub firewall running).
I have utilised a similar system with a Netgear wifi router downstream of my Linksys. I did this because the 2 x Nintendo DS devices don't support WPA, just WEP. So the Linksys connects WPA devices and the Netgear connects the WEP devices.
I have configured 2 separate IP networks; 192.168.0.0 for the Netgear network - the router itself is 192.168.0.1 "internal" and 192.168.10.101 "external", with its default gateway as 192.168.10.1 - and the Linksys network as 192.168.10.0, the router itself being 192.168.10.1.
I switched off the SSID on the Netgear and the routing is configured so that there is no route from the 192.168.0.0 network to the 192.168.10.0 network, just to the internet.
I think I had to configure a static route on the Netgear to allow devices to communicate across, but it was a while ago and I can't remember - and it's a pain to get into the Netgear now so I'm not going to check!
You might want to try the setup of the "cascaded" router with an RJ45 cable before splashing out on the mains adapters.
My suggestion would be to get it all working without encryption, then once you have proved that the routing is working correctly you can enable encryption. Consider using fixed IP addresses if you have only a small number of PCs connected - it's one less thing to go wrong, plus it is slightly more secure.
Also, remember that you need 5 channel spacing in the UK for non-overlapping wifi channels (e.g. 1, 6, 11) if you are operating both WAPs together. I have 2 routers side-by-side with no interference.
Of course, you may just decide to switch off the wifi part of the BT hub.
HTH
SD