Do I need a home network?
If you have more than one computer in your house, you can benefit from having some sort of home network. A home network allows you to share a single Internet connection, use a single centralized printer, and share files between computers.
Sharing a single internet connection
If you have a broadband Internet connection, you will likely want to use it for every computer in the house. Dial-up connections can also be shared through software configurations, though multiple computers using a single dial-up connection can be painfully slow.
There are several ways to share a single internet connection. Perhaps the most popular is to simply install a router and connect all of your computers to it. Several different models are available from reputable manufacturers such as Cisco and D-Link. Most also include a firewall so computers in the house can share information without leaving it open to the Internet.
Windows can also be configured to share an Internet connection directly, by plugging one computer into a second that is plugged into the Internet. This requires that the computer connected to the Internet must be running obviously, but usually does not require buying any hardware beyond a cable.
Servers in the home
Once only trappings of the most serious computer geek, home servers are becoming much more popular as a part of the home network. Having a server allows for a central place to access files such as music or videos. More importantly, a server can be configured to automatically back-up important files on computers throughout the house.
The term "server" can be confusing. It does not refer to any specific type or configuration of computer. A "server" is simply any computer being used primarily to 'serve' data to other devices (computers, mp3 players, or any network-aware piece of electronics). Since it requires less computing power to serve data than most activities people do on their computer, older-generation hardware works very well in the home server role.
A home server can act as a single place to store (and backup) all of your pictures, documents, music, and videos. Using a home server, other computers in the house can be setup to automatically store copies of documents on the server anytime they are saved or created normally; providing important backups with *zero* effort once the computers have been set up.
Full integration of multiple systems throughout the house
If you have a relatively new home alarm systems, chances are it can be monitored and added to through a home computer network. More advanced home and small business security systems that video camera integration, which depends on digital storage of video. This method is much more robust than tape systems, and requires considerably less physical space to store footage from an unlimited number of individual camera inputs.