Thanks Murph! It's probably going to take a few sessions to digest all of your very helpful information, and you did great explaining everything in lay terms ... I guess I'll just hide the telephone wires in the wall and figure out what I want to do for the component rack later.
I knew you were going to pull through for me Cam but that dang Murph beat you to it ... he probably just types a little faster.
All of the answers you've gotten thus far are excellent and spot-on, but I don't know if anyone has clearly said it...
What you need is a router, preferably a wireless one.
Your "Internet" arrives at your house at your DSL modem. Think of the DSL modem like the electrical transformer that sits on the power pole in your neighborhood. That device takes the high-voltage main line and converts it to the 110/220v that your home electrical gear can use. When you *just* use a DSL modem for your Internet, it's like running one long extension cord from your microwave to the transformer itself. It might power the microwave, but the rest of your house is dark. Fine for the microwave (safety issues aside...), but not very useful for the refrigerator, nor anything else in the house.
Adding another DSL modem (you'd need another phone line...) would be like running *another* extension cord out to transformer. Not exactly what you want to do.
What you need, then, is an in-home distribution network. With electrical power, your circuit-breaker box provides short-circuit protection but also splits off power to the various circuits, outlets, and switches, in your house. With "the Internet", a router does the same thing, but for the bits of data. You'd connect your devices to the router with ethernet cables, or if they're wifi-enabled devices, they can connect wirelessly to the router. And *poof*, those devices are able to talk to eachother and the internet at large.
802.11b vs 802.11g vs. 802.11a vs 802.11n are certain wifi standards that a device or router can accept. b is the oldest/slowest, g|a are newer, and n is the newest. You'd likely want to buy something that's 802.11n compatible, as that will be the latest/greatest with the best range & speed but will also be backwards compatible with just about every wifi device ever made.
Whether or not you need to run ethernet cable to your AV rack depends on whether or not your gear is all wifi enabled. Personally, I prefer hard-wired connections for stationary gear (like printers, my AppleTV, my Dish Network DVR, etc), as it's faster and normally has fewer quirks than wifi connections. So if you *can* run ethernet cable from the vicinity of your DSL modem to your AV rack, I would do that. Especially if you have an opportunity *today*, and you may not tomorrow. Use "RG6" ethernet cable to do it. And I say 'vicinity of your DSL modem' because the router & DSL modem will need to be connected via an ethernet cable, so they'd often be found sitting next to each other.
Routers are generally pretty good these days. Go to any store that sells electronics (Wal-Mart, Best Buy, Staples, Office Max, etc, etc) and take a look. Linksys, Belkin, D-Link, and Netgear are the most popular brands. If you like Apple products, Apple's AirPort Extreme base station is a great router that's especially easy to set up and use if you're using a Mac (though it is as compatible with everything as any other router).
Good luck!
