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So you have decided to use linux as a router. There are a variety of reasons to use linux as a router and there are several varieties of linux to choose from. For the purpose of this guide we will use pfSense because its not only one of the most widely used distributions, but is also one of the easiest to install for a novice. The first decision you will need to make is what kind of hardware you intend to install it on. While it does run on PPC hardware and some embedded hardware, most people choose to simply run it on x86 hardware.
Being that the operating system is not very hardware intensive, you can use hardware as old as a Pentium II or AMD K6-2. The documentation specifies that you will need at least 128 MB of ram though. If you plan on keeping it in a room you may occupy consider using a passive heat sink to keep noise down. Other components you will need include the basics, like some kind of optical drive to boot the Live CD from. If you are building this PC from new or old parts consider the form factor for your case carefully. A smaller form factor case means it will take up less space and become easier to mount or tuck out of the way.
Of the next important parts in building your router is selecting a couple of NICs (Network Interface Cards). Check to see if you have an on board NIC, if you do you will only need one additional one. Its ideal to get a decent quality card, that will last a long time and will have a high compatibility with your linux distribution. You will need a monitor and keyboard hooked up for initial setup but after that the system will be fully managed via the web interface.
