I have recently become famous in my dorm for turning my atheros-based wifi card into a wireless router, and turning my room into a LAN party room.
I am using a discontinued DWL-G520 card in my PC, getting 105Mbps according to the website. I know that USB 2.0 can transfer data 480Mbps. So will a USB dongle that gets >= 108Mbs be just as good/better as a router?
My idea is that if I can't host for the night, they can all chip in and buy such a dongle, and I can give them a USB drive with a linux install that will set up the router automatically.

Here is my suggestion .

Get some people to donate some un-used hardware and create a Dorm Game Server PC . Also go buy a cheap Wireless Router (eg Asus 520GC which costs AU$35 to $45 in Australia).

The game server does NOT have to be high end hardware
1 gig of RAM , old P3/P4/Duron, etc 10 to 20 gig drive.

Try to avoid using anything USB based for networking .

I would setup on the game server a Linux based operating
system and a few dedicated game servers .
eg
ET QW - Linux Dedicated Server ,
BF Heroes - Linux Dedicated Server ,
World In Conflict - Linux Dedicated Server (I know they have a windows one might be a good idea to check if a Linux one exists),
etc

Some good FREE (Freeware/Opensource/Free commerical Games)
that might be popular would be :

- Urban Terror - FPS clone of CS/CSS - Avail for Win, Linux , Mac
- Nexuiz - FPS clone of Quake 1 - Avail for Win, Linux , Mac
- Open Arena - FPS Clone of Quake 3 - Avail for Win, Linux , Mac
- Savage 2 - FPS/RTS - FREE LAN PLAY without needing to pay to unlock the internode modes.
- Wormux - Free worms clone - Avail for Win, Linux , Mac.

Besides hosting the game servers you could have a web page to offer a copy of the free games so others can play , it shouldnt be too hard to setup the DNS redirect when someone connects to the access point it re directs them to the game servers website

If you can get the maximum wireless throughput you'll be fine; that should be possible with USB2.0. Just keep in mind that not all wireless chips support Host AP. Of course if you set up as a peer-to-peer that's fine - except that you essentially have no protection from people stealing your bandwidth. Well ... not really ... you can always set up an ssh tunnel which would effectively lock out would-be-bandwidth-thieves.