To connect just two computers, a cross-over cable for direct Ethernet-card to Ethernet-card connection is sufficient ("networking for the poor") but the connection through the hub is more straight-forward. To connect more than 2 computers together, you need a hub (~US$30 to US$80) and normal (not cross-over) cables. (If you have extra Ethernet cards, you may also consider installing more than 1 Ethernet card on a computer to make it a router. Then you use direct connections to other computers using the cross-over cables, and save the expense of a hub. This adds a configuration complexity to your system, yet in some situations can be technically advantagous.)
Here is another suggestion on setting up a different kind of network, using a very much older type hardware, which uses coaxial cables (like for the cable TV). For this, no hub is necessary. Because this networking scheme is older, it can be assembled using cards and parts that are sometimes available for free:
(edited for space) From: John.Edwards@brunel.ac.uk Subject: Linux Guide-a suggestion
Hi. Many older 10Mbps network cards (and some newer ones as well) have a BNC connector and you can usually pick up old co-axial cabling when companies upgrade to UTP. Add a T piece for each machine and a 50-ohm terminator at each end (about 1 pound or $1.50 each) and you have a home network that will happily support more machines than you probably have room for. And most importantly--no expensive hub (or cheap hub that can cause trouble). There are other advantages to co-ax as well, it's tougher to break and more resistant to noise from other equipment.
Disadvantages: There is a limit of 185 meters per network segment of thin co-ax, 30 machines per network, and you're stuck at 10Mbps, but I don't see any small home network needing more than that. Also if one cable goes down then the whole network stops, this shouldn't happen often unless someone unplugs a cable section. You can disconnect the T piece from a PC without harming the rest though.
Quick diagram, T for a T piece and Term for a terminator:
Term-T-----T-----T-----T-Term
| | | |
PC PC PC PC
The various parts connect together using BNC connectors similar to a TV & video connector but with a bayonet that secures the two sockets together. For more details see the /usr/doc/HOWTO/Ethernet-HOWTO
The most straigh-forward and modern, however, is to get one 10-base-T ethernet card for each of your computers and a one hub to connect them all.
