I going to be moving into a house with 8 other guys and I'm trying to figure out the best way to share the internet connections. The supplies I have are:
I was wondering if I i can somehow makes this into a multiport router or rather a switch that connects to the internet.
anys solutions or better ideas would be greatly appreciated

Install something like Endian Firewall or m0n0wall on the 500MHz PC, you'll need a couple of NICs. Then specify which one is internet-in and which is LAN-in and it should sort out the rest. Then plug the hub into the LAN-in NIC and the rest of your computers into the hub and hey presto.

would that make the hub act like a switch. and would I see any performance increases in if I used it as a router

i don't think a hub can work as a switch :P a switch is more intelligent than a hub, it determines where packets are destined to go, instead of sending them everywhere. Yet they can both serve the basic purpose of linking up machines.

Your computer would act as the router/switch, and handle the packets coming in/out and where they are destined for.

Performance increase as opposed to what? a router you buy in the shops? (which are really cheap btw) possibly, but only serving 8 machines, not sure you'd notice you'd have more control over it (do you need control?) and you could setup rules, proxies etc. on the machine if you wanted, also port forwarding etc (can be done on most standard routers too)

performance over just using the hub. and yeah control would be great. I would like the traffic shape the network so that everyone gets there fair share of the bandwidth instead a bittorrent user hogging it all. the stuff on the endian firewall looks like anything i might need. I just want to know if its worth the effort

Well it may reduce network bandwidth a little, but then so will sharing files across the network too.

Either way you are going to need something to share the connection, whether it's a router+modem, a modem+Linux box router or a modem+workstation that forwards connections on, the last one is probably the worst choice, especially in performance on the machine itself, a dedicated otherwise unused machine would work yes.

As for worth it, you said it has everything you need, so doesn't that make it worth it? only you can decide that.

if I used switched instead of hubs would that increase the performance?

Again, it would be negligable, using a switch or a hub isn't really the problem here, it's that it's 10baseT or 10Mb/s which is going to be pretty slow for 8 machines all transferring files etc. (depending on their size) if you have 100Mbit nics in the machines, may aswell get a 100mbit switch.

yeah thats what I was thinking by like 2, 5 port switches for 20 bucks I could kick the network up to 100mbps I was just curious about the hub because I found it in a dumpster