I agree with RossMAN, along with the other two reasons.
Basically, the reasons for upgrading a wireless router:
1) Router dies, cannot be fixed. (I learned that when a router "dies", it could just need a replacement power adaptor.)
2) New router has new features that you want/need, AND it's cheap.
3) Router has fatal security flaw in firmware, and there is no factory firmware upgrade. (This is a good reason to try out DD-WRT or Tomato too.)
When I was living with a relative, they purchased a WRT54G v1.0, connected it to the DSL modem, and I had a wireless G USB adaptor for my PC. I later picked up a Motorola WR850G, which has the same chipset as the WRT54G router. I found a beta firmware that had support for WDS mode, and found out that the factory firmware for the WRT54G supported Lazy WDS mode, even if it lacked an explicit WDS setting. So I ran WDS for some time, which was nice, I could just connect my PC through the onboard ethernet. (I picked up a second PC, and they both could then use ethernet, rather than have to purchase a second WiFi G adaptor.)
I don't know if I knew about DD-WRT yet.
When I moved, I picked up some WNR834Bv2 Netgear refurbs for like $30 ea, which I thought was a deal for N routers. Those I flashed immediately to DD-WRT. (I may have learned about DD-WRT from a Hot Deals there either here on AT or on FW for those routers.) I used two, and then later, three, of those routers in WDS mode.
One of the routers was "failing", so I decided to upgrade to some WNR2000v2 units (32MB of RAM rather than 16MB), so I bought a bunch of those off of Newegg. My first batch was v1, so no DD-WRT. But about a year later I bought two more shipments, and both of them were v2 units, so DD-WRT was supported.
I also discovered that the problem with the WNR834Bv2 unit was actually the power brick. I ordered some new power bricks off of ebay.
So now I'm swimming in Netgear wireless N 300 routers, with DD-WRT.
I ran into some issues with my wireless throughput going way, way down (1mbit or less), so I decided to pick up some refurb Cisco E2500 units from Cisco's home store for under $40, and those are dual-band routers. I had planned to put DD-WRT on them, and run them in 5Ghz WDS mode, with 2.4Ghz as an AP. I got DD-WRT on one of them, and then I discovered that the DD-WRT for those routers doesn't support 5Ghz yet! So I became a Tomato user, as Tomato did support 5Ghz on those routers. So I'm currently running Tomato over 5Ghz in wireless bridge mode (found out it gave a little more speed than WDS mode).
Unfortunately, even with a clear 5Ghz band and 40Mhz channels, and being one room apart, I can't seem to get more than 40Mbit/sec out of the links, so I was thinking of getting some Wireless AC draft 2.0 routers. The TrendNet model has WDS support in the factory firmware for both 2.4Ghz and 5Ghz. TigerDirect had them marked down from $160 to $120, and for a while Newegg was matching that price. I don't quite have $240 to drop on a pair of routers though.
So I'm going to wait until I can get some decent refurb AC routers for like $50 or so before I jump in I think.