We have 2 mom-and-pop coffee shops here in Mankato that have wireless access, and it seems to work well both places. One place just has a wide open AP (not that I'd recommend this, unless it's well firewalled). The other just takes your MAC address and adds it to their access point (access is MAC-address filtered). Oddly, the one where you have to sign up seems to have more wireless users, though this may just be due to the regulars at each place.

There are improvements that could be made to either. The wide-open one doesn't have a very strong signal, and I'm not sure that they're running it well-firewalled or with the knowledge of their ISP. The MAC-filtered option really should have some automated way of signing up (e.g. when you connect to the network, you fire up a browser and are taken to a sign-up page - I've seen Cisco equipment that can do this), or the people running the shop should know how to find the MAC address through the appropriate OSes (at least Windows and Mac OS - Linux geeks are likely to know how to type 'ifconfig').

Either way, if you spring for a better AP, you shouldn't need a linux box to power anything beyond what the AP can do. That'll save you at least $400 of the $500 you have planned for the linux box. And I think abuse won't be much of an issue. Mankato is about the same size as the town you're describing, and these two shops haven't had any issues (as far as I'm aware) with abuse. Set up firewall rules appropriately to make sure, but overall, it shouldn't take a very complex setup to do it well.

Now, the better option might be to try to convince the coffee shop that it would help their business, and get them to chip in.