Home networking is a booming business these days, driven by the very low cost of almost anything relating to computers. You can head down to your local computer store and buy a box with everything that you need to set up your own local area network (LAN) and share files and play games to your heart's content.

There are plenty of choices to be made, and one of the most confusing is whether to use a switch or a hub to connect your computers.

A little background will probably help. In the old days of computer networking, there used to be very few choices for connecting computers. You could use coaxial cable, also called "ThinNet". All of the computers connected in a line, one computer to the next, sort of like a long cable with computers attached to it. Network architects called this sort of thing a bus topology.

Another choice was to connect the computers together using twisted pair cables, almost like telephone wire, with a central hub or concentrator, to connect everything together. This kind of assembly was called a star topology, or sometimes "hub and spoke".

There were also variations on the two themes that combined both bus and star topologies, sometimes with dizzying levels of confusion.

Each method had its strengths and weaknesses, trading price for performance and vice versa. Ultimately, the star topology won out because it became the lowest cost, high performance method on the market. It's what we use today.

The early concentrators were all hubs. A hub is a fairly simple device that effectively connects all of the ports together, adds some logic for detecting errors and moves data in from one system and out to every other system. They're cheap and a virtual no-brainer to configure. But they aren't the best of performers because a hub can't establish a direct connection from one computer to another. When a data packet is transmitted from one computer, it actually goes to all of the computers, although only the destination computer receives the data. When large numbers of data packets are moved, the network slows down because in the process of moving data from one computer to another, every computer sees it, tying up bandwidth. Also, if two packets enter the network at the same time, the packets collide with each other, which means that they must be retransmitted, wasting more time.

As time passed, smarter hubs entered the networking scene. These were called switches because they were capable of actually switching data from one port directly to another. That meant faster network performance and fewer errors. Packets could be sent directly from one computer to another without wasting the bandwidth of the entire network attached to that switch.

The switch accomplishes its task by using a little bit of intelligence. Many switches on the market today actually hold an entire packet in a buffer, then "look" inside the packet for its destination address, then route the packet directly to the destination. That saves precious network bandwidth, since only two computers are involved with the data exchange, instead of all of them. And once the packet is exchanged, the switch "knows" how to route future packets to their destinations, since it has now associated an IP address to a MAC (Media Access Control) address, a unique identifier to each network card.

Switches also tend to reduce network collisions by monitoring the network as specified by IEEE 802.3. Without delving into technological gobbledygook, the switch examines the network lines and holds any packets that would result in a collision until the lines are clear. That specification also allows switches to detect packets with errors and direct the computer to resend them.

Most switches are capable of full duplex. Many times this is advertised as something like "200Mb/s bandwidth", but that's just marketing spin. Full duplex means that data can simultaneously travel to and from a system on the network. No matter what the box says, the fastest you can go on a 100Mb network is 100Mb each way. Of course, your network card must also support full duplex operation.

So, this probably makes switches look like a very tasty option in your network. And you're right. Four or five port switches are in the US$100.00 range, with similar hubs going for less than half of that. But as nice as switches seem, there is still a market for hubs.

If you only have two or three computers on your network, a switch may be overkill, unless you're transferring a lot of data between all three systems. You'll probably find that you just don't move enough data to generate any packet collisions.

On the other hand, if you've got four or more systems, you'll probably want to take a close look at a switch. Data transfers and online games can quickly clog up your network if you're using all of the computers at once. While you won't be able to increase your bandwidth, a switch will more effectively use what you have. Also, if you have just a couple of computers now, but you're going to expand in the future, get a switch so that you'll be ready.

Other situations may call for combinations of switches and hubs. When switches were new and very expensive, they were usually used to connect different hubs together to form larger networks of hubs. Although traffic could potentially become bogged down within a particular hub's network, that slowdown wouldn't affect systems outside of the hub.

In a home network, you probably won't come across that sort of situation, but if you've got more than one hub in your network, you may want to consider connecting the hubs to a switch instead of to each other.

The bottom line comes down to the number of computers in your network and the size of your wallet. Even though hubs are very cheap, switches aren't too much more expensive. If you've got more than a few computers to network and your wallet isn't too thin, it's probably worth your while to consider a switch.