ISP backdoors on their "free" routers: yes, they exist. The admin password is usually on a sticker on the router - and you can change it using your local management infterface. But then, if you need service, and if changing that password disables their backdoor, they won't help you.
That said, considering how many of those "free" routers are out there, it might be interesting to compare, say, the top 2 here with some representative cable and fiber/telco routers. You might have trouble finding a telco router that's better than N, though.
The point about multiple clients is real. Thanks for testing with interference. Consider my place (certainly not a high-end establishment): 2-4 computers (perhaps one wired, depending on where it's being used, and at least 2 on all day), 3 phones (all using wifi at home), PS2, PS3, Wii. Since I use AntennaInAttic for a TV provider, no wifi there, but that will almost certainly change when the TVs are replaced. The telco router only has 4 wire ports, so even if I wanted to do the electrical work for it wiring would be of marginal use absent downstream switches. Then there's the fact that almost everybody in the neighborhood has wifi too - my computer frequently lists (in addition to my router) at least 3-4 access points that have enough signal strength to matter.