Unfortunately there is no space left for me to squeeze mpd inside unless you don't want the web gui . This can be done but it involves building openwrt from source code.
You have other options apart from squeezing mpd inside WR703N:
1) get/build a mpd with pulseaudio support for your nas. This is probably the best solution if you can get it done.
2) get another WR703N and install mpd on it with nfs/cifs support so you can mount your music collection. Only if you know how to build openwrt from source and patch things if necessary. This the next cheapest solution and the running electricity bill is among the lowest.
3) get raspi when its out next year and install mpd on it and mount your music collection via nfs/cifs. However you need to wait till at least January next year. It costs $13 more than WR703N.
4) Any x86 machines with mpd running on it. Probably the easiest to set up but consumes too much electricity and not good if you want to run 24/7.
We can probably live without auto discovery (takes precious space) as I have setup the dhcp host name and you can use name like openwrt-pulseaudio instead of ip address to access WR703N.
Not sure about the ipod dock as I have never used any apple's products. In theory you can mod a cable for that purpose.
I am now setup like #4 with an old laptop and hate it.
I am pretty much assuming your pulseaudio firmware supports wifi. Tell me if I am way off base there. I don’t have a lot of confidence on the WR703N wifi chipset and have a feeling pulseaudio streaming would be glitchy as I have a weak signal where I need the speakers. Also there is the issue of network saturation with raw audio streaming.
So it looks like a choice between mpd + alsa (if it is small enough) where it would be a stand alone wifi player _or_ a pulseaudio player with probably choppy music, but networked and in sync with my main wired speakers.
Am a little worried about tinkering with my nas (raid) as it is my main repository for all the important docs and backups.
The other alternative is running mpd + pulseaudio on 2 Raspberries pi, one replacing my current x86 setup and another with wifi card and remote speakers. So raspi vs WR703N, raspi is more expensive by $13 + wificard, but looks like it will give me the ability to switch between standalone mode and synchronized mode. I am raring to try pulseaudio on WR703N first in any case.
Finally my speaker cabling and WR703N powering plan is best expained by this product. Not splurging 30 bucks for a cable though.