I'm not iceman but I am also using PCCW and have the NEC modem. I have added a Linksys WRT54G wireless router to my setup and everything works.
For your setup, the line going from your port 2 of the NEC modem goes into the internet port in the router. The PC connects to the Router (any of the 4 available ports). You should focus on getting the router working through a direct connection to the router before you start with the wireless configuration. No crossover cables are needed. All straight cables only.
You do not need to touch the phone cable.
I'm not an expert but I'll help what I can.
Let me know if you have got this far and i'll provide more info.
EDIT: I have experimented with my NEC modem and all 4 ports provide internet to my computer but only port 1 can provide the Now broadband TV.