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So the router talks with the modem.
that way also, you don't have to have any other computer turned on to use another one, since the router will take care of all the networking stuff.
Of course, if you really need a home server, then you're in a different situation. But it's just fine for my rather generic home network, which is basically everyone having their own internet connection but no need for computers to communicate directly (except for a couple computers I have talking only to back up files on each other so I don't lose my valuable data).
I love it! And when friends come visit, they can just plug their laptops into the network with no extra software needed (assuming they have ethernet on their laptop already, which they all do). Plug and play simplicity.
And the router offers excellent firewalling becuase the computers behind it can't be seen by anyone on the net unless they're really bound and determined. But you'll never suffer from random FTP and Telnet hacking , etc.
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