+1 for Draytek routers – we use them for all our home based workers and also for our VPN endpoint here in the office. They are really easy to configure and just seem to work.
I’m also a big fan of powerline setups for small home networks and would agree that a pair of adapters plus a small switch or additional wireless AP would meet the requirements of the OP – I’ve got exactly that setup for a couple of home users who live in rambling old properties with a shared internet connection.
They’re not neccessarily an expensive option either – growth in the home AV market means some are now coming in at under £40 a pair – see here:
http://www.misco.co.uk/Product/164418/D-Link-PowerLine-Homeplug-AV-Network-Starter-Kit
Crankman – FWIW, I had the same router as above supplied by my home ISP and it was completely pants, suffering from a load of connection dropouts etc. Binned it for a Draytek in pretty short order.
EDIT – most recent router I bought was this one – great bit of kit. Easy to set up, supports wireless QoS and the USB connection enables it to be connected to a USB hard drive in order to act as a NAS.
http://www.draytek.co.uk/products/vigor2710.html