If you are close to your exchange and the BT lines are of good quality
an ADSL modem/router will work quite happily on an extension phone line
provided the extenstion is connected before the adsl filter.
However if you are some distance from the exchange and want a fast
broadband service you should try and reduce extension losses to a
minimum ; the best way to install (for reduction in losses ) is to get
a fillter which is built into the face plate of the main phone point,
the connection can then be taken by cat5 cable to the router.
for info see
http://www.adslguide.org.uk/newsarchive.asp?item=1364
To keep your network wiring tidy various colours and lengths of patch
leads can be found down to about 1 foot long but remember where a lead
goes directly from one device to another which are very close together
as for example connectiong a hub to a server that a minimum length of
cable is required --- I never use cables less than 1 metre long in this
situation.
If you shop around you should be able to find patch cables for 75p
upwards depending on length.