The best way you can do this is by buying a router. It sounds like that you are making an attempt to setup the Internet Connection Sharing with the help of a right PITA to continue with it. Router is the best way for solving this.

Except I misinterpret with your environment, Rodeo is correct. The modem to multiport router. Multiport router is also a hardwire connection or wireless connection for setting all the pc's in your network for sharing all the file/printer in it. This would be the simplest as well as the cheapest way to do it if other pc's are close to the modem or router.

What I am able to do is to turn my PC (which is been connected to the internet via USB modem) to a router or server and then connect it to the switch which are having the rest of the PCs connected to it. I also consider that considering the simmer setup which had a one port ADSL router connected to a LAC card in a PC, and this PC has an additional LAN card which is been connected to a switch, and "broadcast" the internet to the PCs that connected to this switch.

I think you are having an ad hoc setup. I am not sure how to do it, but am sure if you mix the Ad Hoc and or make a search in Microsoft you will find the instructions of doing it.

Do you still have time to return the modem for one with an Ethernet connection so that you can easily get the router where you desire to have it? You also didn't share your operating system with others, so the best I can suggest is that you search for <OS> ICS where the <OS> is your operating system, e.g., XP ICS or Vista ICS.

Actually I don’t wish to change my USB modem. The reason is that I want to setup the network this way which is shown below: I saw this setup in an internet shop, wherein I noticed that the manager of the shop can control and limit the internet packets every PC on the network uses through that server/router PC (which connected in a straight line to the modem) so that no PC can take the full speed of the broadband in torrent or somewhat, parting the rest stressed with slow connection. About the operating system its XP, and I is able to install win server 2000 or 2003 in it.

Yeah, but you will require a software on the Gateway for controlling the network to flow through it. You may also desire to setup ICS on XP. As another user had recommended you to Google Search for XP ICS. You may also get loads of tutorials for how to setup the ICS on Windows XP.

Thank you guys... that was very much helpful. But I also observed that all the tutorials which I located talked about sharing a dial up connection or Ethernet connection. Is it probable to share a USB connection as well?

Properties of my LAN card and clicking at the Advanced tab, I’m unable to find "Internet connection sharing". Only "windows firewall" and the rest are blank! Is ICS not installed? How can I install it? I'm also making use of XP sp2 in my computer.