I am currently sharing 4096/1024 kbps cable internet connection with my neighbor. We used to share the line through a simple switch, but whenever one of us were using P2P programs, downloading bigger files, or even watching streaming video from Youtube, it would lag the connection, which made for a bad gaming or VoIP experience. Bandwidth limiting on each PC wasn't an option since the limit would stay even if the other PC stopped using the connection.
The solution was buying a router with a QoS (Quality of Service) capability. Basically, QoS is about setting priorities for different types of traffic, or "traffic shaping". Thankfully, there are plenty of cheap routers nowadays which can do QoS like very expensive commercial products, although on a smaller scale and not so effectively. Still, it works just fine for something like prioritizing game or voice communication traffic and preventing your annoying roommate from using all the bandwidth.
I chose the WRT54GL model from Linksys, because it's possible to install 3rd party firmware on it. Please note that new versions of this device aren't compatible with Linux firmware; older versions are, but you cannot find them in shops, although they'd probably be avalaible on eBay and such. You can find a full list of different WRT54G router versions on Wikipedia.
The installation was a piece of cake - the router works as DHCP server, automatically assigning IPs to computers connected via ethernet ports. I didn't need wireless so I disabled it altogether. All I needed was to plug in the cables and it was good to go.
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