Cable enters house, gets plugged into a wireless router. This then makes about a 100m+ radius around itself into a wifi hotspot - you'll be able to access the internet using the PC Card on your PC within about that radius. The radius does depend on the structure of your walls etc, though.
Costs: this depends, I guess. Netgear's the one I use - cost is £122.42 from Amazon click here - that's 54Mb/s. That's the upper end, though. You can get cheaper - if the connection's through ethernet, or plugs into the ethernet (network) port on your computer, then you can go for something a lot cheaper that'll just plug into your modem, for example click here . That one is 802.11b, which is 11Mb/s. For your connection, though, you won't notice a difference - I use 802.11b myself, with a 10Mb/s internet connection, and it cuts the speed down to about 2-3Mb/s. So for 1Mb/s, no problem.
You then need the wifi card on your PC. If it's a desktop PC, then it'll be either USB or PCI. If a laptop, then ether USB or PC Card. Something like click here will suit either, and costs under 20GBP. That's only 802.11b, so if you go for 802.11g then it'll cost more - expect something around 40GBP.
Cordless phones may cause a problem, as they work on the same frequency as wifi does...
Hope this helps a little. I'm sure other people will fill out what I've missed... Probably also clarify my ramblings.