When starting with the mybook I didn't know if I should do a firmware upgrade first before modifying or keep the old one. Yes, you will lose the C-compiler and NFSD but if you're able to modify it, you can get it back.
A friend of mine still has the old firmware on it and I noticed some scripts didn't run.
commands like find doesn't support "iname" and some other little differences…..
I would therefore recommend to upgrade the mybook to the latest firmware before you modify it.