I installed DD-WRT firmware on our WRT54G last night. It went very smoothly except the wiki failed to note that the root username has a default password of admin (I thought it was empty password). Also, the wiki wanted users with the original Linksys firmware to use the mini generic image, not the standard generic image. This was non-obvious.
After installation, it worked perfectly and the WPA2 was easy to set up. I haven't had a chance to play with the advanced features of DD-WRT, but I do intend to do that IP preference stuff for DHCP that Vinny mentioned.