Sorry! to your question about router, here is an excerpt from wikipedia's simple definition of vpn
"A virtual private network (VPN) extends a private network across a public network, such as the Internet. It enables a computer to send and receive data across shared or public networks as if it is directly connected to the private network, while benefiting from the functionality, security and management policies of the private network.[1] A VPN is created by establishing a virtual point-to-point connection through the use of dedicated connections, virtual tunneling protocols, or traffic encryptions.
A virtual private network connection across the Internet is similar to a wide area network (WAN) link between websites. From a user perspective, the extended network resources are accessed in the same way as resources available within the private network.[2]"
And a Lifehacker article on how to choose
http://lifehacker.com/5940565/why-you-should-start-using-a-vpn-and-how-to-choose-the-best-one-for-your-needs
also, always use http secure (HTTPS) vs http
http://www.wisegeek.org/what-is-the-difference-between-http-and-https.htm
What you are saying could be true. But I have a hard time believing that internet companies are not capable of hacking into or decrypting http requests from our homes. Especially since all http requests go directly to their servers from our homes. I bet you that every http request goes to their servers and from their servers to a data warehouse where they build profiles on each and every customer. Thats what my book is making it sound like anyways.
You say a VPN will prevent them from doing that, but I don't know if I trust that completely. You have to figure that internet companies are hiring IT networking experts. I think they have the resources to be able to see anything they want that passes through those servers.