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Dumb question: What does this device do?

It's a switch. The basic difference between a router and a switch is that a switch connects devices that are on the same network (LAN), and a router connects multiple networks together (like connecting the computers on your home LAN to your ISP's network, which then has their own routers connected to the many routers of the internet). Your typical SOHO router is actually a router and a switch in 1 box...the LAN ports are switch ports. A SOHO wireless router is a router, switch, and wireless access point in 1 box.

I'm guessing that should answer your question, but there is a lot more to switching and routing than that, so please ask if you have more detailed questions.
 
This is 1/3 of a Wireless Router.

A Wireless Router is actually a Combo unit that combines in it plastic box.

1. Routing circuits that provide the capacity to share Internet connection between few computers.

2. A Switch (like the device in your link) that enables connecting few computers to form a Local Network (LAN).

3. An Access Point, which is a Wireless device that connects wireless computers to the Routing circuits, and to the switch.



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To use networking jargon/terminology, a switch basically allows each node to have a unique and dedicated communications path (collision domain). So it can send/receive data uninhibitied from collision along given Ethernet/Layer 1 links. It literally switches data by sending it to a given host and MAC address.

So say you have a printer, two workstations, and a server, all connected to a switch. if one of the workstations is running MS Word and the user prints off a document, the switch would recognise both the workstation and printer MAC addresses and be able to direct data specifically between them.
 
If you need to connect a few devices to each other, this is fine, but in order to share internet you will need a router. Most people in home/small business will use these to add more ports to their already routed network.
 
The normal "router" you have at home is actually not a router. Its called an ISR, integrated service router. What you put in your OP is a switch, it will connect things on a LAN, routers will connect things over a WAN, or multiple networks together.
 
If you need more ports than the integrated switch on your router provides, you can connect a switch to one of the LAN ports on your router. This works better than having two routers because the routers would create separate local networks and your devices won't all be able to "see" each other. Also, a switch is a bit less complex and less-likely to lock-up or require a reboot. If you daisy-chain 2 routers, you probably will have reliability problems and double the router-related network disruptions for some of the devices you have at home.
 
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