Member Rara Avis
That's not an either/or question, Acire - you're talking about two different levels of the networking architecture.
Peer to Peer (i.e., Peer: one who is equal in social standing) simply means a network where there are no "boss" computers. Everyone on the network is a "client," typically with a human at the keyboard, and all the clients do all the work. That is differentiated from a "File Server" network, where one computer (or perhaps just a few, in the case of a large network) control all the resources, and the File Server is responsible for most of the work. File Server networks requires a Network Operating System (NOS), such as Novell or NT Server. There is also a Client/Server Network, a hybrid where the work is shared, but that's more "future tech" and not really supported by many software packages yet.
The type of network is essentially the Application Layer, the highest of the seven levels defined by the OSI Model. When you start talking about hubs, routers, switches, or direct connect, you're talking about the Physical Layer, which is the lowest of the seven.
While there is a lot of blurring in the past ten years, a hub is really nothing more than a power booster. Remember, you are sending electrical current along that twisted pair and very low levels of current at that. The hub accepts the signal from one computer, then boosts it so it can be sent a little farther than would otherwise be possible. In the old, old days, computers were daisy chained together to create a network, creating a lot of potential problems (not the least of which was what happened when someone in the middle had hardware problems, effectively bringing down the whole network). How they were daisy chained came to be known as the topology and was a subject of vigorous debate (star versus ring, etc). All of today's hubs also perform some time of collision detection, a phenomenon that happens when two computers try to "talk" over the same wire at the same time.
A router is essentially a hub with more intelligence. When a datagram comes into a hub, the device boosts the signal and sends it out over ALL the other wires. Every computer on the network gets the message, though usually all but one will ignore it. A router is smart enough to look at the datagram packet, especially the routing information (the IP number in a TCP/IP network) and send it only where it's needed (down to the subnet - which is where the subnet mask in your Control Panel comes into play). This cuts down on the "Broadcast" traffic on the network and is an essential component to building larger networks. Without routers, there would so much yelling across the wires that any network larger than a few hundred computers could never get any real work accomplished. For smaller networks, a router is more luxury than necessity.
Fifteen years ago, networking was a mish mash of different standards and it took a lot of experience (and antacids) to get them to work together. Today we are down to just three big standards. Token Ring is the IBM standard and probably will be around a while longer. IPX/SPX is the Novell standard and, with the release of Novell 5.x, on its way to becoming extinct. TCP/IP, of course, is for the rest of the world. Things are getting downright easy these days.