I guess it should be possible to share the connection over LAN, and then use the router as a WiFi access point for the other devices.
Set up the router
You will not use the router to connect to a modem, but it will rather just "share" the shared internet connection.
First, you need to access the router's settings. Consider your router's manual to see how to get to the settings. Ideally, you would reset the router and then follow its setup guide, because there might be some specific settings from your ISP.
Without knowing your router model, it's a bit hard for me to tell you what to do exactly. Probably you only need to connect the router, and then access its setup page either over its WiFi network, or by plugging your desktop or laptop into one of its LAN ports. You can find the setup page by entering the router's IP address in some browser. Which IP address that is, I don't know. Again, read it up in the manual.
Once you're in the router's settings, do the following:
- Enable the WiFi connection. It should be enabled by default, but some routers require you to manually enable it.
- Secure your network. Under security options, there should be a way for you to specify a password for your new wireless network. Here you will have multiple options, probably WEP, WPA and WPA2. Set up either WEP or WPA/WPA2 security. WPA2 would be best if your router supports it. Consider having a look at the router's manual for that.
- Disable DHCP. Look for a setting that says something about automatic addressing (or "DHCP"). If it's enabled, disable it – this is important!
- Connect the router and the computer. The LAN port of your desktop should be connected to one of the router's LAN ports. Your router will probably have multiple ports at the back. One of these is designated for the modem, the other one(s) are for your local computers. You should not use the port where your modem was (the so-called WAN port)
Now the router is set up.
Enable connection sharing
You should be able to share your 3G connection over your desktop PC.
- Go to "Network Connections", locate your 3G connection
- Right click and select "Properties"
- Select "Advanced"
- Enable "Internet Connection Sharing"
- It should be shared over your LAN interface
Now try to connect your laptop or your Android phone to the WiFi you set up. Your devices should acquire an IP address and be able to connect to the internet through your desktop. I hope Windows can lease more than just one address using ICS, not too sure about that
How many such simultaneous connections are supported?
As many as the router supports.
Will the sharing be safe? i.e. can any other device having WiFi (outside my house, say downstairs) be able to connect to my home network set above?
Only if they know the password you set up with WPA2. WEP passwords can be easily cracked. Additionally, you can set up a MAC address filter (if your router supports it, see its manual), which would limit the accessibility for your network to devices you authorize (e.g. your laptop and your phone).
Without additional information (like your router model), I can't help you more.