This is a add-on to Agthorr's writeup:

A switch is very similar, in use, to a hub, and one can be substituted for the other. A hub is sort of the center of an ethernet LAN. All PCs, servers, network printers, etc, connect to the hub, and from the hub to everything else. In layman’s terms, when a pc sends information to another pc, the signal goes to everything that is attached to the hub. A switch, on the other hand, can better determine where the signal is meant to go, and only sends it there, greatly cutting down the traffic on the network. Sort of streamlining the process. This is a good thing. Unfortunately, switches are much more expensive than hubs. That is a bad thing.