um this is how it works, i dont know if you guys do LAN parties often or not but I do...
if you only want two computers connected together, you will need an ethernet cable, but there are two different types of Ethernet cables, Straight through, and Crossover. If your just gonna hook two PC's Xboxes, or PS2's together, then you will need one crossover ethernet cord to go from one to the other.
If you want multiple PC's, you will need a router(s) and or a Hub(s) depending on how many PC's/ Xboxes you have. (router=4 ports=4PC's)
and for each computer you have, you will need a straight through Ethernet cord for each thing you have connected on your LAN. Now if your doing xboxes, then your set to go, just turn them on and set up your game. but if your using PCs then you will need one of the computers on the LAN to be running a server (dedicated or Listen) I'd recomend designating one computer as a dedicated server, because you will probably get a lot less lagg. (dedicated server= a comp designated to serve the multiplayer game files= no one playing the game on it)
(listen server= still hosts the game like a dedicated server, but allows someone to play on that computer with the server too = increased chance of lagg)
Now if you have more comps than the number of ports on your router/hub , then you will have to connect two hubs/routers together. this can be done by plugging a crossover ethernet cable into one of the output ports on your first router, and the other end into the intput (WAN Port) Port on the second router. this will allow the comps on the new router to acces the game on he origipnal one. this process can be repeated for as many routers as needed.