I’ve never found a good way from the command line to clear out old kernels on Debian or Ubuntu systems, I know there are systems like computer janitor for GUIs but nothing as useful or simple as package-cleanup for rpm based systems.
Even with a modified WR703N you will still likely run out of space quite quickly if you try and use some of the larger OpenWRT packages like Samba or Asterisk. The best way to add more storage is one of the tiny USB flash drives that fit in side the USB port on the router, something like a 16GB SanDisk Cruzer Fit flash drive.
The TP Link WR703N is a tiny little embedded Linux system, sold in China as a travel 3G router, you can pick them up for less than £20 from eBay. They are very popular with hardware hackers as they are cheap and flexible. If you look carefully on eBay you can find a modified version of the WR703N which has 64MB of RAM and 16MB of flash as well as having it’s serial lines connected to the micro usb port, meaning you get serial console access over the same cable as you plug in for power! These versions are made by a guy in China with the handle SLboat, he has documented the process on his wiki or you can buy them ready made for about £30 including postage.
I’ve now got both OpenWRT and Debian wheezy installed and working on my iConnect however they both expect to be the only OS installed on the iConnect so the u-boot config needs a bit of tweaking to have them both installed and bootable.
OpenWRT is an entire build system designed to produce flexible linux system images for embedded devices with full package and configuration management, there is a version of it for the Kirkwood SoC included in the Iomage iConnect.