OSI model knowledge INCOMING:
There are layer 2 and layer 3 switches.
Layer 2 switch is described above by David E, however it does not "route". Layer 2 switches "switch" packets from a port to the destination port. This is a traditional non-managed switch.
Layer 3 switches do the same as Layer 2 switches with the added features of:
-Being managed (usually by a firewall)
-Assigning an IP address to individual ports, not just a virtual interface usually used for ease of access
-Holding both a MAC address table AND an IP table
-Ability to effectively "route" IP frames based on IP address
Currently, the router module in your ISP-provided box is likely doing the routing at layer 3 and the switch module is doing layer 2 switching.
The multi-purpose box your ISP gives you has a built-in switch that will perform virtually the same as a switch marketing towards gamers. There's a lot of confusion about the terminology usually. Switches, routers, modems, ethernet, all get mixed up and people usually don't even mention WAPs and hardware firewalls!