6: Typing vi didn't work for me. Didn't try before ipkg upgrade. Are you sure it is installed with your 1.7.8 v2 pkg?
7/8: Got errors with ipkg upgrade for several packages without using root. Probably got to do with different user path statements but I didn't troubleshoot that much. Found it worked straight away with root. If you upgrade sudo ipkg, it doesn't actually keep admin in the sudoers file. Try it because then if you are following the instructions and don't know root works you get stuck.
10. Wasn't sure about the patch. Twonky wouldn't start without changed LD_LIBRARY_PATH as stated in
http://www.wl500g.info/showthread.php?t=7945 as twonky wants something in the default asus lib path.