Install DD-WRT, then start trouble shooting. The thing that pops out is that in a standard configuration, .1 is the router's address, not a PC on the network. It doesn't half to be, but it's it'll be a head scratcher for anyone who comes after you if it's not.

I'd be concerned using a WRT54G for 40 or 50 active workstations, but as long as they lay off the bittorenting you might be all right.