Sound familiar, anyone?

I have 15Mb (512K up) DSL, Pogoplug connected directly into my DSL router. Something is not quite right; as soon as someone starts downloading a shared file across the intertubes, my local NW won't even load google.com. It just dies and machines fall off the NW.

Does anyone know what on Earth is going on here?

NETGEAR DG834GT is the router, all components are connected by cables, no wireless and short cable runs. Is there some way of throttling (I actually feel like doing that right now) the router upload? Why would this kill the local NW bandwidth?

Is Pogoplug taking all my NW bandwidth? Do others experience their local NW slowing down or grinding to a halt when people download files you've shared?

Router firmware is 

DBS.