I was thinking about installing pfSense on my old computer to put it to some good use. However, as I am pretty bad with networking, I run into an issue. If I am not mistaken about this, I am supposed to use my old router as a modem, then connect it to the computer acting as the new router. How do I set my router to work only as a modem? Is it something that it will do automatically?
Most home routers have a built in modem. Decent routers have somthing called bridge mode this turns the router effectively into a modem only device and passes the connection to your pfsense box.
You need to give us more info. Is this ADSL? Cable? What ISP (some us ones are very restrictive).
Sorry for being vague. I have an ADSL connection and the cable is cat5e (I'm assuming that's what you asked for). As for ISP, I live outside the US, so I don't really think it could help you.
Good. In that case get yourself a tp-link 8817 rather than your current router. I use this on BT its great, cheap, never goes down and can be put in bridge mode easily.