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Dave22 is correct. I think what's confusing is that LinkSys, for example, has a device which is a router, but also happens to have built-in ethernet switch ports. So it is both a router AND a switch.
I suspect your collision problem has more to do with the fact that your PC NICs are configured for full-duplex mode when in fact they should be half-duplex because they're plugged into a hub. A hub is a shared device, so you can't send while you're receiving. Trying changing the NIC setup to use half-duplex and see if thing improve. They may be set to auto-sense, but change to half-duplex anyway. When using a hub, each node must "listen" for a quiet network before sending anything. In full-duplex they just blindly send stuff, thus the ensuing collisions.
Whether a switch is a good investment or not depends on a few things. You never answered how many nodes you have. If you only have 2 PCs, then a crossover cable will give you excellent throughput because they can run full-duplex.
If you have more than 2 PCs, then a switch would allow 2 simultaneous conversations to take place at full speed. For example, PC1 could speak to PC2, while at the same time PC3 speaks to PC4, each pair getting full bandwidth. With a hub, they'd all be contending for/sharing the same bandwidth.
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