Sharing 20Mbps Connection Between 7 computers

I have just moved into a house with 6 of my friends to study at uni. We pay for a 20Mbps internet connection from virgin and when only one person is onine it's lightning quick. The problem occurs when more than one person connects. We are all into our P2P networking and therefore demand a high bandwidth, the problem is the bandwidth is not being shared evenly between each computer. One computer will be downloading at a very high speed whereas all the others will be slow. This also affects just general web browsing if someone is on a P2P network.

I recently got hold of NetLimiter Pro and believed this would sort out all our problems. Installed it on every machine in our house and gave each person 3Mbps worth of bandwidth each (2.5 down/0.5 Up) I beieved this would therefore mean most of the time that everyone would get a fair share of the bandwidth, only when everyone is using all 3Mbps would there be a problem as it would need a 21Mbps line. Firstly NetLimiter does not seem to be that strict with the limiting as i downloaded something at more than triple the rate my computer was limited to. Also it seems that when quite a few people are connected it slows the internet right down to a standstill almost. Another problem is that one person has a Playstation 3 and would like to use it online but i've so far banned him from doing so as i cannot limit his bandwidth and he therefore takes it all when he plays on it.

Basically i'm looking for a solution to fix all my problems. I am currently in my second year studying computer systems engineering (MEng) and therefore know a little bit about computers but, due to this, i am looked upon as the person that needs to "fix the internet" everytime something goes wrong. I have breifly had a look at purchasing a new router with QoS built in but the only ones i've come across are where you can set priority for certain mac addresses rather than a bandwidth limit. I also heard about using a Linux machine as a router inwhich i would create a program to share the bandwidth equally between the connected computers. Maybe i'm going about this all the wrong way but please, if anyone has any idea, could you let me know.

I have experience with this situation as I lived on an out of country campus and the 5mbps DSL line was shared between up to 28 people (using VoIP, games, downloads, surfing). Let's just say it was painful at times.

First off, I can see a flaw in your method: 2.5mbps down x 7 people = 17.5mbps (the number you quoted is most likely the download rate alone). Let's just say that you started with the most complicated solution

Limiting the bandwith at the source is probably your best bet. Here's a few hints:
1- Have a group chat with your buddies and explain to them that downloading by torrents should be set during off hours (that period where you sleep, when folks are at the party, during the day, etc). Schedule is everything.
2- Expect the line to be slightly slower during the peak time, that's a given. If downloads need to be done at that time, make sure that they know to limit their speed to something acceptable (200-300k/sec should be the upper limit here).
3- Tell your buddy that he can plug his PS3 without problems. Gaming usually doesn't suck much more than 5-10kilobytes/sec total (up AND down combined).
4- Tell your buddies that they should try to limit their connections on bittorrent (7 people fetching 200+ connections each is bound to crash your router sooner or later). 100max is a good number per individual as a starting point.
5- Watch out for the upload rates. That's where most of your bottleneck is going to happen on an asynchronous line. Again, rate limiting on applications / respectful use between the roomies should limit this issue.

6- This one is kind of obvious but hey, what do I know: Share the crap that you download on your LAN. Don't download 6 times the same tv show / game / movie / program if possible.

I'd hope that after a while of this new sharing program, you and your roomies should start pacing themselves and finding time slots that fit their needs properly. If anything, a nice table pinned on the fridge door with hours or days dedicated to different people should be a nice reminder (so if one or two stay during the weekend, they can do their heavy downloads then and wait during the week).

Good luck!