The differences are pretty dramatic.
My 1.0.7.8 custom firmware is based off the Asus 1.0.7.8 firmware and keeps all of the original web interface components intact while still allowing one to extend the function of the box by installing optware packages. The target audience for this firmware are those with some Linux experience who want the convenience of the web interface for basic configuration but want their box to do more than just what Asus had envisioned.
Openwrt contains no Asus components at all and is true Linux at its finest.
If you want full flexibility and enjoy full-blown Linux in a small environment, install Openwrt. If you generally like what Asus provides and just need the box to do a little more, use the custom 1.0.7.8 firmware.
- K.C.