basic internet connectivity should pretty much work with nothing more than a 10 port hub and a router that can do NAT if not provided by the DSL provider. You can pick up a SoHo router from Linksys or Netgear for well under 100$ with a 4 port switch built in. Add a 8 port hub and you should have room for everything for probably around 150$. Configure DHCP and NAT and you should be good to surf.

This gets everyone connected but if you want to setup a workgroup, map drives, share printers, etc you will probably want to search the archives here, or maybe someone has a good link to offer you. If you get stuck feel free to drop a post here, I am sure someone will be able to point you in the right direction.

In supporting broadband connections for over three years, I found hubs to be very problematic with LAN Internet connections. Technically everything you said is fine, but from a practical standpoint, from my experiences, someone who does not care to be intimately involved in troubleshooting would be well served to avoid the use of a hub in this situation.

Ideally I'd recommend a 10-port or even 16-port (for future expansion) router & switch unit, but for someone with a "very very small budget" they may be a bit pricey. Alternately I'd say getting a three wireless routers ( $40.00 each - with mailin rebate ), connecting one-to-another via cross-over cables ($9.00 each ). It's not the ideal solution, but for under $150.00 it'll get the job done with the least amount of headaches.