Yes it's possible, and I actually use this following set up myself.
I use a Linksys WRT54GL running
Victek's modified version of
Tomato firmware which, amongst other things, supports QoS and bandwidth limiting by IP.
Be aware that the WRT54GL is only a router, so if you are planning on using it with an ADSL connection you will need a separate modem to bridge/half bridge/PPPoE to PPPoA bridge. I've been playing around with the different methods of connecting various modems to the router for a while now (it's not always particularly straightforward) and I've recently discovered that on my line a DG834Gv3 working in bridge mode with the router handling the PPPoE (PPPoEoA really) connection works very well. If you wish to go down this route I'd be happy to help out.