Expanding our home network

"A router generally assigns IP addresses via DHCP, and does DNS and gateway functions. Routers typically have switches built in (as is the case with your current wireless router). A switch only forwards packets (in simple terms).

Think of it this way: consider no internet connection, a local only network. With two computers plugged into a router, you can just get to the other computer by typing \\othercomputer in your Explorer address bar. With the same two computers plugged into a switch, you're not going to be able to talk because there are no instructions to tell the switch where to send the packets.

Now to the real question:

Your wireless router is probably currently serving as your dhcp server, gateway and dns server. You should keep it that way, and add a switch into the network below the router.
Plug the WAN port of the router into the modem, and one of the network ports of the router into your switch. Plug all of your PCs into the switch. You can still use the other 3 ports on the router for networking too, which gives you 10 ports (7 left on the switch and 3 on the router).

For an 8 port, I like these Netgear switches. I use them frequently for small networks at work. Next step up is this 16 port model.

In any case, I would go for a Gigabit switch because pretty much all new computers have Gigabit NICs. If you're transferring movies from your desktop to your media center, you will definitely appreciate the higher throughput."