Router Suggestion for NAS

I have recently set up a home network.
I have 02 broadband and am curently using there standard router. i think it is a belkin?
I have a freecom 350 wlan NAS media player currently connected to the router via 100Mb/s ethernet.
Each person has a laptop or desktop (student accomodation) connected wirelessly.

Now then, the problem i am having is that if one person is transfering media to or from the hard drive, the network is so clogged up that no-one else can do anything (not even access the internet).

Why is this happening? when a router states wireless transfer speeds of upto 54Mb/s is that global or per connection?

Is there any way to stop this from happening or do i have to buy a new router?

Coluld i connect more wireless routers via ethernet to the main one to increase global speeds? or is this too complicated?

Does anyone have any suggestions on a new router? i am looking for budget solutions as i am a student.

Any suggestions would be greatly apreciated.
Thanks,
Elliot