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Router Ethernet Question

Hello,
I'm new to networking and I am planning to switch from wireless to a wired connection because of stability issues. I'll try to make this as clear as possible for my situation.
I have a router with internet access a floor below me and I'm planning to drill a hole where I can thread a Ethernet cable from downstairs to my floor. The first jack E1 is occupied (from the modem; internet). Will plugging an Ethernet cable on the second jack E2 grant me internet access if I plug the other open end to another router/switch? (I don't really know the difference between them.)
My main question is, do I need to buy a switch or a router? Because I would like to also have my other devices such as my PC and PS3 to be hardwired.
Are there other configurations to the existing router I need to change?

Pictorial

Modem <Ethernet> Wireless router <will it work? if... Ethernet> Router/Switch <Ethernet(s)> Devices.

If it's too complicated, I'm sorry and I'll try to restate my question. :\
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More about router ethernet question
  1. Best answer
    Install a switch and you wont need to do any additional configuring. Everything plugs into the switch and then one cable runs from the switch to the router. You could use a router instead of a switch, but you would need to disable DHCP on the second router
  2. Hmm, okay sounds simple enough. What is DHCP? And what will happen if I don't turn it off on the second router?
  3. DHCP is what gives your PC IP addresses. Having 2 of them means both attempt to give out IP addresses which generally leads to multiple machines being given the same IP which does not work.
  4. Check here for more info on how to setup 2 routers on the same subnet.
    http://www.tomshardware.com/forum/33700-42-ultimate-modem-router-setup-thread
  5. Best answer selected by Phool101.
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