Here is the deal:
If you do not get a router and just plug the DSL modem into your hub, then when both you and your roommate connect to the internet, you are each going to be getting an IP from your modem. Most modems will not allow this, but even if your modem does, most ISPs frown on users getting multiple IPs unless they are paying for them.
There are 2 options for the router. The easiest is to buy a hardware router. The prices on these things have become so cheap, it's really the best solution any more. If you do not get a separate router, then 1 or your computers will have to become a router. You put 2 NIC cards (1 goes to the DSL modem, 1 goes to the hub) in this computer, then use some kind of routing software. Win98SE and WinXP have ICS built in, otherwise you can use software like WinGate, NAT32, and a host of others. The major downside is that the computer acting as the router must be on in order for the second computer to access the internet.
In reality, with the price of routers becoming so cheap with the proliferation of broadband internet connections, it is really the best way to go. They are pathetically easy to set up and they don't draw a lot of electricity being on all the time. The only thing you have to watch out for is if your ISP does not want you connected 24/7 you have to unplug your router periodically in order to truly disconnect from the 'net.