Abrass is completely correct in those definitions. I'm assuming you're needing to whether to buy a cable router with a hub or a switch? If you're going to be running a small network without much data transfer (part-time LAN gaming, web surfing, usual web stuff) then a hub is fine for these conditions and is more cost-effective.
When switches become a must, are (usually for companies) when you have constant data flowing in and out of all of those (let's say 10) ports at once, at a higher utilization (let's say 60%), all day long. Then you need a switch to handle the traffic more efficiently and reduce collisions.
Many small to medium size companies use switches as a backbone, then use hubs at the workstation/cube areas to reduce theamount of traffic on any hub at one time. Again, you have just a few people doing typical things on these hubs, and there's not much need to use up a switch port for each user.
Large companies pay good money to have cabling run from (usually un-moveable) each cubicle/office back to their wire closets to a dedicated switch port, because of the constant flow of data on those ports, and they can afford to have the cabling run for each port, making things neat for all.
Most smaller places are in existing building without this kind of cabling and aren't afforded the building ability to run these cables. Switches are always a general rule in business when you can afford it and when the structure of your building allow it. In a smaller environment, hubs work fine, especially for your home LAN.
The only reason you'd want a switch on your home LAN would be if you had DSL and were hosting your own domain, web site, FTP, and other services on multiple servers. In most small cases (MCSE study) you can run these services on one or two machines, and you're not really running enough data over the lines to need a switch.
