1 - Is the wireless router connected to cable or DSl modem?
2 - Does the wireless router have open ports for wired ethernet?
3 - Are the comps upstairs just talking to each other or not talking at all
4 - Where is the usb wifi adapter? That is still unclear to me?
5 - What make and model WiFI router are you using?
Well I don't know your budget is but my 1st choice would be to get a wifi adapter for comp1 and that should do it, if I understand your diagram right.
That is the easiest way and you can get rid of the hub. I would test the wifi usb from comp1 on comp2 first to see if it will link up (you may have location issues with the 11.b). If it does your good to go. Maybe get the same model wifi usb or see example for another.
Hub----->Comp1<--USB Wifi Adapter (Has Internet access)
`----->Comp2 (no Internet access)
Cable Modem----->Netgear Router--->Comp3 (Has Internet, of course)
If you change your mind and decide that you want to run a cat-5 cable from downstairs to upstairs, you can place the Netgear router upstairs and eliminate the hub completely. The cat-5 cable would connect directly from the modem (downstairs) to the Netgear router (upstairs). Comp1 and Comp2 would be wired to the Netgear router, and both would have Internet access. The USB wifi adapter would be connected to Comp3 downstairs.
If you decide against this, the easiest thing to do is buy another USB wifi adapter for the second upstairs computer.
With install mods and his time it may add more cost. It starts to be cheaper and maybe simpler to get the other USB wifi adapter (about $30.00 w/S&H). Of course with a wired solution (if he can do it) he won't have signal strength or possible location problems.
I set up a D-Link 614+ wireless router & 4 port wired for internet access and file sharing. When my daughter is home from college, I drop a D-Link DWL-520 card into her PC. After configuration, it works just fine. The set up is 802.11b compliant and for in the house, it's just fine. Her room is also downstairs in the SE corner and the router is upstairs in the NW corner.