I just finished wiring my house (a real pain from the basement to the upstairs through wall plates, etc) and if you're only using 2 computers, like Larry said, you can use a cross-over cable. But, if you're considering ever adding a third computer, you're going to need that hub. Since you've already got the hub, you might as well use it! When using the hub, you'll be using straight-thru cables from the hub to each computer. Like Larry said, you can expand a hub (for example if you've already used up all the ports on one hub you can connect it to another) by using an uplink port. However I disagree with Larry - Uplink ports have crossover wiring already installed, so you actually should use straight-thru cable with that too. Connect one end of the straight-thru cable to the uplink port and then the other to a normal network port on the other hub. Note: the uplink port on a hub is usually shared with one of the ports, so if it's a 5 port hub, you can only connect 5 computers, or 4 computers 1 uplink. Usually even though there are separate jacks for the 5th (or 8th in the case of an 8 port hub) the 5th port and uplink cannot be used at the same time. Or, some hubs have a selector switch for straight-thru and crossover operation on that last port.
What it comes down to: If you're using the hub with an uplink port, you should never have to use cross-over cable. The only time you need to use crossover cable with a hub is if you are connecting 2 hubs together and neither hub has an uplink port.
Cross-over cable: Only use this stuff if you're connecting 2 computers directly together without the use of a hub. You can only reach 10BT speeds using cross-over cable.
Don't use cat5 for phone lines.
I haven't decided how I'm going to cover up those little holes yet, so I'll have to pass on those other questions.