Sureshot, we have to know whether what you have is a hub or a router first. Even if it is a "combination" router with 4 port hub.....consider it a router.....
Here's why:
a hub only connects computers on a physical layer. it's essentially the same as splicing the two pieces of cat5 together. It just lets the electricity they use to communicate get to the other computer.
A ROUTER on the other hand is a MUCH more intelligent device. If you have a router, it should be handing out what are called DHCP (dynamic host configuration protocol) addresses. These are IP addys from a pool of IP addys you designated.
ALSO, the router provides a little service called NAT (network address translation) which hides all of your local machines (you and your buddy) from your ISP. ISP's keep track of who is connected to them by MAC (media access control) address which is burned into the hardware of every NIC (network interface card). NAT makes it look like everything coming into your network (you and your buddy) is only coming to one machine (which it is....your router) by maintaining a public IP addy on it's internet port, and then handing over the information to the machine on the local network that asked for the info.
here's the kicker: if you're only using a hub, then your ISP will have YOUR COMPUTERS MAC registered, and no one but you will be able to access the internet on your home network unless you're running win 2k or higher and ICS (internet connection sharing) with your buddy configured to use you to get him out to the internet. In this case, you're just acting like the router described above.
Hope this helps, home networking can get.....interesting.