what model is the wireless router you have right now?
maybe adding a wireless bridge repeater to boost the signal on the 2nd floor might help.
as to connecting another router to the phone line on the 3rd floor, this will most likely not work since the ISP will only allow one modem connection.
The router is a small white AOL broadband router with green lights on right hand side.
HUAWEI echolife HG521
Firmware version - v1.03
Hardware version - C.1.01
Hope this helps its all the info on the back of the router,
Many thanks Paul.