Hi Nimesh, welcome to HWF. Since you are sharing a router, adding software to your PC is not going to help at all. In this case it is up to the router, not the PC.
That in mind, it's an unfortunate fact that most home-grade, plastic routers are not capable of doing advanced features like bandwidth accounting, traffic shaping, or QoS -- any of which would be a good solution to your problem. I'd look over your routers features and see if it has capabilities for any of the above. In the likely case that it doesn't, what I'd recommend will vary somewhat based on the time, resources and technical skills at your disposal. Since I have no idea what you have to work with, the following suggestions are in order of pure technical preference:
1) Build your own router/firewall using open-source software such as pfSense, m0n0wall, or IPCop.
Advantages: Enterprise-grade security, features and performance. Relatively easy setup requires little or no Unix/Linux experience. Open source means indefinitely long support life, quick patching, and a large and technical user base in case you need help.
Disadvantages: Requires some basic PC and networking knowledge to get setup. Also, it's built from on-hand PC hardware, so it will of course draw more power than a cheap network appliance and is likely noisier.
Cost/Resources: Depends heavily on what you have to work with. To run pfSense, you'll need at least a 100MHz Pentium1 with 128 MB of RAM -- anything better is gravy. For m0n0wall or IPCop, you'll need about half that. You'll also need at least two network cards -- one for the WAN connection, one for the LAN -- or three network cards if you don't already have a network switch. If you don't have any of these things and you're not too proud to hit a thrift shop (or eBay), you can probably score all the necessary hardware for under $100.
2) Buy or convert an existing compatible SOHO router to use open-source DD-WRT firmware.
Advantages: If you don't already have a spare old PC lying around, this would be a cheaper option -- especially if your existing router happens to be DD-WRT compatible. The capabilities will be
fairly close to that of a PC-based open source firewall (as listed above). Additionally, a SOHO-grade appliance will draw little power and generate little heat.
Disadvantages: Commodity network appliances can potentially be unstable over time, and may require periodic reboots. They also have very limited hardware which may cause slowdowns during high-traffic -- though not as much as you're experiencing now. They also have a smaller feature set than a full PC-based router/firewall.
Cost/Resources: If you don't already have a DD-WRT-capable router, you're look at around $40-100, depending on what you want. For instance, you can get a Linksys WRT-54GL for about $45 most places, and it easily flashes with DD-WRT. If you already have a DD-WRT capable router, this is probably your best option.
3) Purchase a relatively inexpensive SOHO router with built-in QoS or accounting capabilities.
Advantages: Probably the easiest setup of my suggestions, but could be more difficult depending on which SOHO router you went for. They are pre-assembled, and provide consumer-grade technical support (hotline, email, etc) as part of the purchase price. As with above, low power and heat concerns with embedded hardware.
Disadvantages: Cost is usually fairly high for what you're getting, since you're getting into low-grade business hardware here. Closed source firmware, meaning if the company discontinues that model you're not likely to see firmware upgrades. Also, as with above, embedded hardware is usually pretty minimalistic, so you could run up against it as a potential performance limitation. Finally, the feature set will undoubtedly be more limited than a PC-based open source router.
Cost/Resources: If you don't already have a router like this, you're looking at around $75-500, depending on what features you want.
4) Add a second network card to your PC, then install pfSense, m0n0wall or IPCop on your system as a VMware or VirtualBox appliance. Remove the router, and pass all traffic through your PC instead. I.e. the PC would act as the router.
Advantages: Uses your existing PC, so you don't need a lot of hardware you potentially don't have. Also, you get the full flexibility of a PC-based open source firewall solution.
Disadvantages: If your host OS, virtual machine software, or PC hardware has a problem, you'll lose network connectivity. You'll have to leave your PC on 24x7 to maintain internet connectivity. Also, your PC resources will be shared with a virtual machine running a whole other OS. While it won't take too much resources, you're still talking about CPU cycles, RAM and HDD space which you could potentially be using elsewhere. Most importantly, this scenario requires more technical knowledge than any of the aforementioned suggestions and has the most potential for problems. If you're not very confident with your technical skills, this option should probably not be a consideration.
Cost/Resources: If you only have 1 NIC in your PC, you'd need to spend an extra $5-20 on a second NIC. You'll also need to be willing to put a bit of time resources into getting this working as expected. You'd basically be running your router on your PC. The free versions of VMware or VirtualBox will suffice, and the firewall OS'es are open-source, so the software portion of this scenario shouldn't cost anything.
