I did all that a few months ago. Not AOL - I was thoroughly warned off that many years ago.
I bought a second-hand ADSL router off Ebay for £35. That replaced an Alcatel Frog USB modem. All I needed was an Ethernet card (£5 off Ebay) and a short RJ45 cable (£3 ditto).
That was so easy to set up it was silly. The router has a firewall, so Zone Alarm became belt-and-braces. More important, if BT or Pipex drop the line the router immediately tries to reconnect and keeps on till it does. I've not noticed any "lost line" since I've had it It hasn't been switched off this year.
Then I bought a laptop, with built-in Ethernet, and it "just worked". I had a little more fun getting the laptop and the desktop to share files and folders across the network - all down to the settings in Win XP. Folks on here were most helpful and got me sorted.
Then I wanted to link the laptop by wireless. One PCMCIA 802.11b card for £11 (Ebay, you guessed) and a Netgear ME102 Wireless Access Point - plugs straight into one of the 4 ports on the router (£35 Ebay). Again, plugged it in, switched on, and off we went. I wanted the ME102 because it's a duplex transmitter/receiver and that improves signal path reliability no end.
I also bought a Bluetooth dongle for the laptop, and that can talk to the cellphone and access the Internet via GPRS - again, a doddle.
The iPaq can talk to the laptop and to the cellphone via Bluetooth.
And the joke - I turned on the Bluetooth headset to check it still worked with the cellphone after all that, and the laptop asked me if it should play sound through that rather than through its speakers.
So, under £100 for the lot. If I were starting again, I'd get an ADSL modem router with built-in WiFi - might save a few quid.
802.11g is about £30 dearer than 802.11b, is 4 times faster, and makes no difference whatever to me cos I can't type or read that fast anyway.