The newer Linksys WRT54G routers use VxWorks rather than Linux, and have correspondingly less memory. It would be an interesting experiment to try squeezing a cut-down Linux system onto one of the newer devices, as the VxWorks software apparently doesn't work very well (and is non-free and not customisable). Presumably the uCLinux people have some experience with this sort of thing already.
The DD-WRT project has now done this.