Yeah well I'm not sure how the DHCP stuff works exactly, but it definitely does and with more than one client. I also plug my empeg into the client bridge to put it on the network and occasionally my laptop (to get a hard wired 100Mbit connection to my PVR via the WRT54G's built in switch).

I rely on the MAC address passing through since I have some fixed DHCP assignments.

My entire home network is a single 192.168.1.x subnet.