The difference is staggering. HW error rate dropped from 0.95% to 0.58%, and cpu usage while mining on p2pool went from 90% down to 8% max.
Are you mining directly with stratum to p2pool?
Yes.
root@OpenWrt:~# cgminer --lowmem --avalon-options 115200:32:10:43:300 -o stratum+tcp://192.168.1.77:9332 --api-allow W:127.0.0.1 --api-listen --avalon-cutoff 90 --avalon-temp 70
[2013-08-10 00:44:56] Started cgminer 3.3.1
[2013-08-10 00:44:57] Probing for an alive pool
[2013-08-10 00:44:57] Pool 0 difficulty changed to 82.382325
[2013-08-10 00:44:57] Pool 0 difficulty changed to 128
[2013-08-10 00:44:57] Stratum from pool 0 detected new block
[2013-08-10 00:44:57] Stratum from pool 0 requested work restart