In order to network computers together, they need to be somehow physically connected to each other. While it is possible to daisy-chain multiple computers together (i.e., in one port, out another) into a network, it is more efficient to tie all of them into a single device.
Both hubs and switches serve that purpose, and from the outside, they function identically: they allow the connected computers to exchange data among themselves. However, the way they handle data internally is very different.
You can think of a hub like a house with 4 rooms, 4 people, and 4 phones but only one phone number. Each person has the phone to his ear, and they can converse with each other, but if one person speaks, everyone can hear it regardless if the statement was intended for them or not. So, if person 4 wanted to send a message to person 3, he would have to tell everyone to be quiet, say "this message is for person 3" and then say the message.
Figure 1 - 4 port hub
Imagine the same situation except that each room has its own telephone number. This situation describes a switch. If person 4 wanted to send a message to person 3, he could call directly to that room without disturbing the people in rooms 1 or 2. That means that at the same time 3 and 4 are talking, room 1 and 2 could have a conversation without disrupting any other conversations.
Figure 2 - 4 port switch
Thus, the difference between a switch and a hub is that a switch can handle multiple communications between the computers attached to it whereas a hub handle one at a time. If there are only two computers transmitting data across a network, a hub would perform identically to a switch. However, if more than two computers were trying to transmit across the network at the same time, the switch would perform far better.
Whereas a hub and switch serve the same function, a routerserves a slightly different function. A router is explicitly designed to connect two networks together, usually a Local Area Network, or LAN (like a single small office) to a Wide Area Network, or WAN (like the Internet). A router also has additional "smart" software with security features that disallow unauthorized access to the computers in the LAN from the outside.
The Asante FriendlyNET Series of routers have this "smart" software integrated with a switch. They are especially designed for Cable and DSL connections. Your Cable or DSL service provider probably only issues you one IP address. (To learn more about IP addresses, please refer to the FAQ item "What is an IP Address?". When you send and receive data from your computer, you are using that IP address. However, when you want to access the Internet with more than one computer, you'll need another IP address for each additional machine, meaning you'll probably need to pay your ISP additional money.
This is where the FriendlyNET Series router steps in. It does something called Network Address Translation, or NAT. The router assumes the IP address that your ISP provides you. It then splits, or translates that IP address into up to 253 different private IP addresses. Each computer (up to 253) connected to the router can then access the Internet as if it was connected directly to the Internet.
Figure 3 - How the router and your computers interact with the Internet
A nice side effect of NAT is that it creates a natural firewall.