I am planning to get Xbox live when I get my Xbox 360, I have heard that to connect to Xbox live and still be online on my pc I need a router, if this is true what is the best router to use and how much would it cost?
This is not true but it is certainly the easiest way to connect.
1 other way is to connect using ICS(internet connection sharing) but you will need a network port in your pc and will then have to go thru some lengthy configuration to get it working.
ICS CAN be a 'doddle' if you know what your are doing but speaking from experience as someone who isnt too pc minded(as i suspect the poster is) a router is far far easier and the xbox will auto detect settings whereas with ics i found they had to be manually added.