You need some way of sharing your Internet connection. If you are getting a DSL or Cable connection, then a router would be good (make sure you get an ethernet modem). If you are sharing a dialup connection, I wouldn't bother with it. You can usethe stuff built into Windows 98SE and higher, or you can get either SyGate or WinGate to share the connection.
Hubs and routers are completely different. A hub takes all the network traffic that comes to it and sends it to every other connectionon the hub. This allows all of the computers on your network to talk to each other. A router looks at each network packet to determine where it needs to go. In your case, any packets that are going to the internet would be sent to your internet connection and any packets for your local network would be ignored (the hub has already dealt with them).
Some DSL/Cable routers have built-in 4-port switches (a switch is a slightly more complex version of a hub). If you get one of these, you don't need a hub unless you have more than four computers.
Hopefully this helps. If you have any other questions, let me know.