What's an IP Address?
IP (Internet Protocol), is a standard way for computers to communicate. Generally, each computer has its own unique number. When two computers communicate, they use IP addresses to find one another. An IP Address is a set of 4 numbers between 0 and 255, each separated by a period. For example: 192.168.123.254. Even if a computer has a "name" on the network (to make it easier for you to remember), it still uses an IP address to communicate with other machines.
On small networks or sub-networks, messages from one computer to another are broadcast, and all of the machines on the network can "hear" the message. The machine that is the intended recipient of the message responds, and the two machines transmit data to one another.
There are a number of technologies that you can use to set up a small network. This section will cover two of the most common, wired Ethernet and wireless (802.11).
Wired networks are inexpensive, flexible, and it is easy to add new computers. If it won't be much trouble to run Ethernet cable between each of your computers, Ethernet networks may be a good choice for you.
Wireless networks are ideal if your computers are far away from one another, or if you have a laptop and you would like the freedom to use it in different areas. If you are considering moving your computers, and don't want to rewire your network, it would be a good idea to set up a wireless network.