to Cable Forum
First things first, we need to get the ability to connect to the modem using ethernet, not USB, resolved.
At the moment you are using "internet connection sharing", relying on your main PC's USB connection with the modem. This is probably where a lot of the problems lie, as your computer's ethernet port is expecting to communicate with another computer, not a modem (or router). You are going to need to disable, or even delete the internet connection share. Look in "network connections". For the ethernet card on the PC, make sure that it is set to auto detect, under it's properties > TCP/IP settings.
With all that done, power off the modem, and computers. Unplug all existing ethernet patch leads between computers, and the USB connection from both modem and PC. plug your patch lead (must be a straight through not crossover type) between the modem ethernet and computer ethernet. Power modem, let settle, power computer. Hopefully you should have your internet to Virgin Media running. If it doesn't we need to solve that before getting any routers.
---------- Post added at 21:22 ---------- Previous post was at 21:17 ----------
Choice of routers, when you are ready, is probably more simple. I assume your laptop will have wireless, but you can continue to use the desktop wired. Modern wireless routers allow both types of connection simultaneously.
When getting a router, with wireless access point integrated, make sure that the router is cable compatible. In other words it is suitable for connection to a modem. It
must not have an onboard ADSL modem.
There are many types of suitable wireless router. The Linksys WRT54G series have been popular with many members on Cable Forum. Netgear WRG614 is also popular. Others are available too. These are "g" speed (54mbps) wireless, which is the standard of most onboard laptop wireless controllers, and vastly exceeds current boradband speeds (if the wireless reception is good). "n" standard is available - faster - but you'd need a wireless card for the laptop to take advantage, so that will bump up the costs. A "n" speed router will work with lesser "g" speed wireless.
The procedure for setup, relies on the modem ethernet working properly. Power off modem and PC. Connect WAN port of router to modem ethernet. Connect one of the LAN ports of router to PC ethernet. Power modem, let settle, power router, let settle, power PC. Check PC is getting ethernet OK, browse to the router's configuration pages, and setup the wireless, then start the laptop wireless connection wizards.