This project seems mostly dead... which is a damn shame cause its the best out there and I'd love to hop on board.
Regardless I'd like to post bug I've found, and I'm really surprised no one has posted it yet as it was a BIG hurdle for me.

I tried every version of DDWRT available for the WRT54GL and finally found a strange issue with chillispot not properly configuring the DNS server.

The symptoms were:
Re-direction would intermittently work. Sometimes it would work for a few hours. Sometimes it would only resolve the first uamallowed (ie. paypal.com but not paypalobjects.com). And sometimes redirection wouldnt work at all unless the original address specified was numeric (ie. 207.34.23.43 instead of google.com). Rebooting the router / enabling and disabling chillispot would randomly, temporarily, fix this issue.

The fix:
telnet into the router and manually edit the /etc/resolv.conf file to use the required DNS server. Mine was set to the default 192.168.1.1 which isnt even the same subnet as the chilli DHCP, so it could not use the static WAN addresses as one would hope. Changing this value to the ISP's external DNS resolved all issues with the server not starting, improper forwarding, and slow/intermittent uamallowed resolve.

Very strange issue. Hope this helps someone.