You cannot do it with just a switch (the local IP address have to come from somewhere). You have to have a router of some sort(at least without going P2p). Now this can be a computer or a stand alone router. For 95% of the people out there the best solution is just to go spend the $15-150(depending on features) on a stand alone unit. For most uses, the stand alone units are (relatively) hassle free and easy to setup. Essentially you unplug the computer from the modem(or wherever you are getting internet from) and plug the router in between the two. Usually all you have to do after that is reboot everything(sometimes you have to assign address). Then just plug the extra machines into the router. In the event you want to use GigE for local transfers I would advise sticking with a regular ethernet (100) router and buying a GigE switch. Since virtually no ISP provides service greater than 100 and the cost of a regular router + a GigE switch is usually much less than a GigE router, it winds up being the most cost effective way out.
As for building a router from an older spare machine, yes it can be done. Yes is will allow you to control/customize your network. But for me it is just not worth the extra hassle.
Every P2P setup I have seen has been a cluster frack. It would be my dead last choice, including sneaker net.
Last edited by lazlow; 11-25-2008 at 06:43 PM.