Owl,
I have my home network set up the same way that Stott does. With Routers for under $100(I have a Linksys-very happy with it), I would recommend everyone with a broadband connection and more than one computer get one. They are relatively easy to set up, add a level of security and as Stott said, you only need 1 IP address from your service provider. The Router hands out internal IP's for the rest of your equipment. Hands down the way to go in my opinion.

Kent