I wouldn't even allow the XP computers to connect to the internet. You're just asking for a malware infection. A modem would be the device that connects to your ISPs connection type (usually either a phone line for DSL or coax for broadband) A router is what routes traffic out of your private network to the internet or any other network segment and a switch switches data between ports. Typically in a home network a lot of SOHO devices are a combination of two or more of these. Connection sharing shouldn't really be needed since you can by a router/switch combo for as little as $40.