Well there seems to be some confusion as to the how to on home networking.
In short dont make it more complicated then it has to be.
First and foremost this is only a very simple configuration intended to target the average home user that wants to network 2 or more computers with internet access.
This is not intended to be the only way to network, but rather a way to get it done with little to no knowledge of networking.
To start with most ISP dont allow you to have much more then 5 computers sharing the internet connection, otherwise know as an internet gateway. One way to get around this is to install a NAT router like
this one .
I chose that one because I know it is easy to configure.
WALA now you have to configure the router to issue enough IP addresses to handle the network load.
NAT routers obtain an IP address from your ISP so therefore only 1 IP address is seen by your ISP, it then uses a light version of DHCP to hand out IP addresses in 1 of 2 different ranges. One range is the 192.168.0.0-255 range and the other is 10.0.0.0-255 range.
If you need more connections to the Internet then you could always connect
this to your router.
I chose Netgear only because I know that you can connect as many as 253 computers to their routers.
This is just one example of a home network that will get the job done with little to no knowledge of complex networks.
Definitions:
Router: A device that forwards data packets along networks. A router is connected to at least two networks, commonly two LANs or WANs or a LAN and its ISPs network. Routers are located at gateways, the places where two or more networks connect. Routers use headers and forwarding tables to determine the best path for forwarding the packets, and they use protocols such as ICMP to communicate with each other and configure the best route between any two hosts.
Switch: A device that filters and forwards packets between LAN segments. Switches operate at the data link layer (layer 2) and sometimes the network layer (layer 3) of the OSI Reference Model and therefore support any packet protocol. LANs that use switches to join segments are called switched LANs or, in the case of Ethernet networks, switched Ethernet LANs.
NAT: Short for Network Address Translation, an Internet standard that enables a local-area network (LAN) to use one set of IP addresses for internal traffic and a second set of addresses for external traffic. A NAT box located where the LAN meets the Internet makes all necessary IP address translations.
NAT serves three main purposes:
provides a type of firewall by hiding internal IP addresses
enables a company to use more internal IP addresses. Since they're used internally only, there's no possibility of conflict with IP addresses used by other companies and organizations.
allows a company to combine multiple ISDN connections into a single Internet connection.
DHCP: Short for Dynamic Host Configuration Protocol, a protocol for assigning dynamic IP addresses to devices on a network. With dynamic addressing, a device can have a different IP address every time it connects to the network. In some systems, the device's IP address can even change while it is still connected. DHCP also supports a mix of static and dynamic IP addresses. Dynamic addressing simplifies network administration because the software keeps track of IP addresses rather than requiring an administrator to manage the task. This means that a new computer can be added to a network without the hassle of manually assigning it a unique IP address. Many ISPs use dynamic IP addressing for dial-up users.
GATEWAY: A node on a network that serves as an entrance to another network. In enterprises, the gateway is the computer that routes the traffic from a workstation to the outside network that is serving the Web pages. In homes, the gateway is the ISP that connects the user to the internet. In enterprises, the gateway node often acts as a proxy server and a firewall. The gateway is also associated with both a router, which use headers and forwarding tables to determine where packets are sent, and a switch, which provides the actual path for the packet in and out of the gateway. An earlier term for router, though now obsolete in this sense as router is commonly used.
WAN: A computer network that spans a relatively large geographical area. Typically, a WAN consists of two or more local-area networks (LANs). Computers connected to a wide-area network are often connected through public networks, such as the telephone system. They can also be connected through leased lines or satellites. The largest WAN in existence is the Internet.
LAN: A computer network that spans a relatively small area. Most LANs are confined to a single building or group of buildings. However, one LAN can be connected to other LANs over any distance via telephone lines and radio waves. A system of LANs connected in this way is called a wide-area network (WAN). Most LANs connect workstations and personal computers. Each node (individual computer ) in a LAN has its own CPU with which it executes programs, but it also is able to access data and devices anywhere on the LAN. This means that many users can share expensive devices, such as laser printers, as well as data. Users can also use the LAN to communicate with each other, by sending e-mail or engaging in chat sessions
o There are many different types of LANs Ethernets being the most common for PCs. Most Apple Macintosh networks are based on Apple's AppleTalk network system, which is built into Macintosh computers.
o The following characteristics differentiate one LAN from another:
Topology : The geometric arrangement of devices on the network. For example, a devise can be arranged in a ring or in a straight line.
Protocols : The rules and encoding specifications for sending data. The protocols also determine whether the network uses a peer-to-peer or client/server architecture.
Media : Devices can be connected by twisted-pair wire, coaxial cables, or fiber optic cables. Some networks do without connecting media altogether, communicating instead via radio waves.
LANs are capable of transmitting data at very fast rates, much faster than data can be transmitted over a telephone line; but the distances are limited, and there is also a limit on the number of computers that can be attached to a single LAN.