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  Hub vs. Switch - What's the difference?    
       
  A hub works like a telephone party line. Only one computer can talk at a time. Here, the first computer prints to the printer, but the message is broadcast to all of the computers on the network.
 
A switch works more like our modern phone system. Computers can talk with each other on private connections so multiple conversations can be carried on at the same time. Here, the first computer and printer make a private connection during printing, while the fourth computer transfers a file to the fifth computer over another connection
 
Shared Ethernet Hub Switch
Total network bandwidth is limited to the speed of the hub, i.e. a 10Base-T hub provides 10Mb bandwidth max, no matter how many ports it has. Total network bandwidth is determined by the number of ports on the switch. i.e. an 8 port 100Mb switch can support up to 800Mb/s bandwidth.
Supports half duplex communications limiting the connection speed to that of the port, i.e. 10Mb port provides a 10Mb link. Supports full duplex communications. This allows devices to both transmit and receive data at the same time, thereby doubling traffic capacity and avoiding packet collisions.
Hop count rules limit the number of hubs that can be interconnected between two computers. Switch allows users to greatly expand networks; there are no limits to the number of switches that can be interconnected between two computers.
Shared hub is less expensive per port. Switch's increased performance is worth the slightly higher price.
Source: www.about.com.telecom