There are two types of ADSL router. One type has an ethernet (RJ45) connector on it, which is used by more expensive services, because it is designed so that several computers on a local network can use the service directly through the router. The other type of router has a USB connector, which provides the cheaper (domestic) services. The USB version of the router is designed to be used by just one computer, although several computers on a local network can be set up to use the service via the computer attached to the router.

Routers at the end of each line must be using the same DSLAM protocol, which will be either 'PPPoE (naturally ethernet)' or ' PPPoA (ATM)'. BT's 'Home 500' service uses PPPoA.
Each type of modem can use either protocol. The service provider decides which one to use. It makes no difference to the user which protocol is run.

ADSL routers, that have RJ45 connections, are provided with a 'static' or fixed and registered IP address. In this way, the local network can be an Internet web server and provide e-mail, ftp and other functions to and from other computers on Internet. Clearly, this type of network must have security, such as a firewall, in place.

Other ADSL connections using RJ45 connectors, where higher security is needed, are just provided with a single, real, RIPE registered, IP address and the other computers attached to the ADSL router are given private network IP addresses in the reserved range '10.x.x.x', which is not visible from other networks.
The reserved IP addresses are either set manually on each PC, or via DHCP. The PCs use these IP addresses to communicate with each other on the local network and with the ADSL router, using a protocol called 'network address translation' (NAT). Perhaps the main benefit of ' NAT' connections is that an external hacker can not connect directly to PCs on the private network and cause problems. This is because the local computers cannot be accessed directly by computers elsewhere on Internet, which can only 'see' the IP address of the ADSL router. Note that NAT is not resilient to all types of attack, so extra security is still recommended.

ADSL routers, that have USB connections, are provided with a 'dynamic' (variable) IP addresses. This type of connection is the cheapest to setup and run. More customers are allocated to each segment of the network than other the first type of ADSL connection described above. The 'USB' router can only connect to a USB port on a single computer. This computer must be running Windows 98, Millennium (ME), Windows 2000 Professional, Windows 2000 Server or Windows XP, because other Windows operating systems do not support the USB port.
Computers running Linux can be setup to use ADSL routers.

Other computers on a local network can run any of the Windows operating systems, as they use the service via the computer attached to the USB router. The 'USB' version of the ADSL router is not 'NAT-enabled' and no ports are blocked.

In practice, there is little difference between RJ45 and USB ADSL connections, because networked computers can also use the ADSL USB resource on the connected PC, if they run connection software that includes Windows 'Internet Connection Sharing'. The main difference is that connections from Internet to the USB-connected computers are usually designed to run slower and they are not designed to run a web and other Internet services from the local computer. They may have slower transmission speeds at peak times, because more people share a line, i.e. have a higher 'contention ratio'.

Some potential uses of ADSL, such as web hosting, are not allowed in some service contracts for USB ADSL connections, so it is worth checking details before deciding which service provider and which service to install. If you need them, upgrade to services using routers with RJ45 connectors and fixed IP addresses.