Your wishes are hard to fulfill. Your router has only 240 Mhz, 32 MB RAM and no harddrive. Without swap, thats not enough for torrent/oneklick/usenet. And if you switch on swap on a usb-stick, it will break sooner or later, since there is a wearout. I would stick to a usb-hd constantly plugged into the router.
Best firmware in my eyes is Olegs http://code.google.com/p/wl500g/
Install it with this HowTO: http://wl500g.info/showthread.php?t=10307