Troubleshooting several internet issues

Alright. For the past three weeks or so, my entire family has been having multiple internet issues, and we can't get to the bottom of it. Here's how my network is set up: The router and modem are upstairs, and my parent's computers are connected to it. Another set of two desktops are a floor below it, using WiFi to connect. Our ISP is Charter Communications, and we are paying for 30mbps at the moment. The problem we are having is that when one computer downstairs is being used, the other one has low internet speeds. This is proven in gaming and by using http://www.speedtest.net.The two computers upstairs are not affected. 

During gaming, if my brother were to open up a video, I would immediately have my ping go up to 600+, and vice versa. When he is gaming, my download rates are around 5mbps download, and 3mbps upload. Usually when his computer is not in use my computer gets 18-25mbps. The router we have is a NETGEAR WNR3500L and our modem is a Motorola Surboard that is pretty old. A few people have suggested for me to go ahead a purchase a more powerful router, which on Newegg is giving a 20% deal for Netgear ones, which I find pretty good. Another person suggested that I go buy a pair of powerline network adapters. 

My question is, with the information given, what should we do? Should we purchase a more powerful WiFi router/modem, or go talk to Charter about our internet speeds? Also, why is it that when one WiFi computer is in use, the other one gets heavy lag? Thanks ahead of time.

What kind of wifi adapters are the wifi connected PCs using?  Also, do you have any QoS settings enabled on the router?

 

For reference, I gathered my information about your router from here http://www.netgear.com/home/products/wirelessrouters/work-and-play/WNR3500L.aspx

I had this same issue and it goes like this: You are alloted 30mb bandwidth. If nobody else is on and you have full signal, you will get 30mb. However, each device connected will sap up a chunk of that bandwidth. 30mb isn't a lot with multiple devices running at once. My only recommendation is a higher package. When I called and explained the issue they offered me a test period of a higher package, that solved all of my issues. Contact them about testing the 50mb package, see if that evengs things out.