I think it should be possible in theory. Maybe it's worth looking at if this is possible/available on a "normal" linux PC.
If it is available (with source code) it might be possible to compile it to the CPU of the router. But then it is the problem on how to get it to install on the router.
We don't seem to have any experienced Linux programmers in this forum yet and all these "nice to have" features probably will have to wait until the custom firmwares comes out (Hopefully that is just a matter of time).
However, the problem will be how to control the player. Maybe something via a web interface, but it is still quite limited and you need a PC or something to access it.
There are those really small and nice players that can play of the network and have some buttons for start,stop,next etc and a display to show the track. Those work via uPNP. That way you have the player where you want, which is propably and easier place for access and closer to the place where you want here the music. (see here: http://www.slimdevices.com).
I don't know how much a USB-sound card would cost, but all and all I would say that those really cool toys like the squeezebox have more future in them. You might still use them long after your router is gone. I've also read somewhere that MS Vista will support these sort of devices, so it is likely that more of these type of devices will be available in the near future.


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