Re: switch or router?
Well, it really depends on how complex of a network you're wanting to set up. Switches are cheaper and a lot easier to configure that routers are. But routers have a huge advantage over simple switches, like the ability to port forward, port trigger, and setting up a firewall/gateway to protect your local network.
Personally, I would suggest a simple home LAN type router. You can pick these up at any Super Wal-mart store or online from places like TigerDirect.com or Newegg.com. They'll get the job done without putting to much of a dent in your wallet. Plus they'll help protect your server and other computers within your LAN against intruders.
Hope this helps