Hotspot info request......

Since it will be free, I'm assuming you want to be as cheap as possible?
(I also have a cheap-as-possible "free hotspot".)

How many simultaneous users do you expect?
Any specific reason why it must be embedded?

ZoneCD is a (free and open source) captive portal. It'll run on just about
anything, as long as it has two NIC's and a CDROM drive. No OS is needed.
It is GNU/Linux based, but the OS is on the CDROM. Simply set the BIOS to
boot from CDROM, throw ZoneCD in, and it is running. Throw together a
computer from old parts, build it as small as possible (get creative with
alternative case ideas), and its basically an "embedded" black box anyway.
ZoneCD also uses Dansguard, which can give you the filtering you want.

I just got a Linksys WRT54GS router, which may work itself into my "free
hotspot". I got it more as a new toy to just play around with than anything
else. I'm playing with RADIUS now. They are dirt cheap and highly
customizable. (They run off a GNU/Linux variant, so there are lots of
homebrew stuff out there for it. There is even an embedded captive portal
for it.) Aim for a Version 2, as they seem to work the best with all the
homebrew stuff. Stay away from the V5, as it isn't going to be GNU/Linux
based, and won't be "hackable".

(Serial numbers):
CGN0 = WRT54GS v1.0
CGN1 = WRT54GS v1.0
CGN2 = WRT54GS v2.0
[.Snip N3 tp N5.]
CGN6 = WRT54GS v4.0

ZoneCD:
#

Dansguard (read more here):
#

Cheers,
Eric