I've recently added a second router to my home setup as I was getting fed up of the kids/ friends throttling my LAN with various LAN gaming, watching things on the network media player, wireless access etc. So thought I'd share what I've done.
I had the router just laying about so thought I may as well utilise it as they aren't worth much these days lol. You'd have to check if your routers are NAT capable, but I haven't seen one that isn't in a long time.
The reasons for adding a second router can be various: Maybe you've got kids who stream data on the internal LAN and throttle it (LAN gaming/media streaming maybe), or you may have people accessing the wireless network and have it set to low security for ease or even no encryption, you probably wouldn't want them 'snooping' over your LAN.
Network segregation separates one Network into two LANs using two routers, this keeps the potentially unsafe computers on one LAN and moving the computers/devices that you would like to protect to the other LAN. In other words, it adds another layer of security, more ports and more bandwidth available to the second LAN instead of getting throttled by bandwidth hungry LAN apps/games etc.
Obviously, having GOOD up to date AV/Malware installed as well as a software firewall will reduce the threat to individual PC's that have these installed, but from my experience, a lot of people only seem to have these on their main PC and not every device using the LAN.
If, for example, your wireless connection is compromised, or any of the Wired or Wireless computers become infected with a trojan/malware/Botnet, this could infect the entire LAN. The PC's on the second LAN would be protected from this... if the second router has wireless built-in, either disable it or set it to a high encryption method to make it more secure.
By setting something up similar to the diagram I've put together (2nd post), the two networks are essentially seperate, but Router 2 will still give access to the internet via router 1. By utilising the DHCP server function on both routers instead of the usual method of disabling second routers DHCP, you are creating a secondary subnet instead of expanding just one. All it needs is the 3rd octet on the second router to be one digit up from the first routers 3rd octet.
You won't be able to share files with Windows File Sharing across the two Networks (file and printer sharing would work normally within each Network). If you need to do this, options are add the devices you want to share to the same LAN subnet, or use an application such as VNC.
I now have all my 'serious' gear on the second LAN: Main PC's, networked printer, work/study laptop, nas drives and various other 'gadgets'.
Just thought I'd share here as I imagine some people have a router gathering dust somewhere :)