Generalized systems of integrable nonlinear differential equations of the KdV type are considered from the point of view of self-dual Yang-Mills theory in space-times with signature (2, 2). We present a systematic method for embedding the rth flows of the SL(N) KdV hierarchy with N greater-than-or-equal-to 2 and r < N in the dimensionally reduced self-dual system using SL(N) as gauge group. We also find that for r > N the corresponding equations can be described in a similar fashion, provided that (in general) the rank of the gauge group increases accordingly. Certain connections of this formalism with W(N) algebras are also discussed. Finally, we obtain a new class of nonlinear systems in two dimensions by introducing self-dual Ansatze associated with the W(N)(l) algebras of Bershadsky and Polyakov.