1) Setting up a home network requires a few basic pieces of hardware: a DSL or cable modem to connect to the internet, a wired or wireless router to connect devices on the network to the modem, and wired or wireless network adapters for devices to connect to the router.
2) A router connects devices on a home network and shares an internet connection from a modem. Devices connected to the router are given IP addresses to direct network traffic.
3) Important router specifications include wireless standard and throughput, wired throughput, range, number of ports, and wireless security settings. Choosing a router based on these specifications ensures optimal network performance and security.