Router on a stick has limitations and a layer 3 switch is preferable. I used just such a scenario with ATM LANE with the aforementioned 3Com CB7000 being being augmented by a CB2500 doing the routing. (btw when the CB2500 failed a cisco 2610 router happily did the routing since I had a flat IPX network with the R0AS merely routing IP which was less than 2% of network traffic)
Router on a stick will only succeed where the router and router interface is capable of routing all packets on the network without dropping too many. You have to know pretty much how much data will need to be routed and double it to assess if the interface is capable of coping, since all routed packets go in and come out of the router this way. Thus if the packets account for 56Mbps in one direction and the interface is 100Mbps you will likely encounter problems even if the router itself can cope with that number of packets.
If budgets are tight and you have to vlan your network and introducing a layer 3 switch is not possible, while a suitable router is available then do it, but I would certainly monitor the network carefully since it is a weak point in the network.