This changes things.
With AirPort Express, Apple continues to advance wireless, delivering the first device to pack wireless networking, audio, printing and bridging capabilities into a single affordable, portable unit. Apple: AirPort Express
$129US. Wireless support in the iPod can't be far behind. Apple is busy raising the bar in wireless, music, and home connectivity all in one go.
I just bought a LinkSys WRT54G and I'll still likely buy one of these as part of my travel kit. Integration into iTunes! Printer sharing! Heck, with a USB connection, you could easily hook up all sorts of home networking dongles if Apple opens up some of the specs (I know, I know -- perhaps too much to hope for).
Hat tip to Evan.