If your connecting PC to PC then a crossover cable, PC to router will need a straight through cable.
Chances are the existing USB modem will have to be replaced if you want to connect to the router to connect to the internet. Not many routers have USB ports on them, they usually require an ethernet modem.
Don't know about the router. I would think that it would be better to get a combined router, modem and switch, therefore you will not have to purchase a seperate ethernet modem.
I hope that your network setup goes better than mine. The router / switch / modem i bought was not the easiest to setup, but I got there in the end.