There are quite a few options already out there to do this. I just loaded WiFi-Box on my WRT54G and it is running smoothly (for now).
Why do this? For one, signal boost for the wireless coverage. Normally, the default Linksys signal boost for the antenna is set at 24mW - with WiFi-box, I can take it all the way up to 84mW (though I might be breaking some laws in doing so...). WiFi-box also has a PPTP server built in, not sure if I will use that but I thought it was cool.
There is another Linksys firmware hack called tinyPEAP that has a small RADIUS server built in which looks interesting...
Does anyone here have any experience (good or bad) with replacing the firmware on a Linksys router?