I've looked and it doesn't look like an on-box Radius server is a feasible solution.

I'd really like to have good security for wireless users, plus VPN from the DSL, without relying on an external server.  I'd like to make a mox that I can plunk down, program and configure, and feel safe.  Especially when working on the road.  I may have a network of computers, but I don't want to cart a server around that has to be on for wireless to function.

Is Radius simply a requirement for WPA, or are there other methods, methods that could be embedded?

The radius-authenticating WPA is called WPA-EAP. You can always use WPA-PSK, the type where you configure each client with a preconfigured key, just like configuring WEP.

It is also possible to turn up your wrt54g into a radius server using openradius, gnuradius, xtradius or freeradius. All have been ported and seems to work on the wrt54g. The only problem is the user management that can only be done via a user file and not using an embedded sql database for instance.