The difference is, remember how I said that IP addresses can be specific to the sub-networks? Well, that's all well and fine in your N-Router network or your (separate) modem/router network. However, the Internet only sees the IP that your ISP sets for your modem, which is usually dynamic (meaning it can change)... however, you don't have to worry about that. The only thing you need to worry about is static IPs for your computers in your own little N-Router network, which you said you took care of already.
HANG ON! I went into my modem/router, clicked on WAN, went down to IP Address, clicked on static IP, and put in 192.168.1.100
Yeah, that would be because your N-Router had its default gateway setting detected as 192.168.2.1 (modem's previous IP).
power cycling your N-Router would have fixed your Internet, as it would have detected your Modem/Router's new address of 192.168.1.100... except
, you run into this problem: 192.168.1.100 is an IP that can potentially exist on your N-Router network. Oopsie, so now your N-Router would be trying to ask the (non-existent) 192.168.1.100 computer on it's own network
(the LAN jacks and wireless form that network) for any IP request that doesn't exist on the local network (in otherwords, www.google.com
etc). The reason that you might want to do this: Say you've got a computer with two ethernet jacks... one connects to your N-Router (call it eth0), the other to your modem (call it eth1). You have set Internet connection sharing from the eth1 (modem, connected to Internet) to eth0 (N-Router network). Now computers requesting Internet sites will be redirected to 192.168.1.100, which would be your dual-ethernet computer. This could be useful for advanced firewalling, having a local copy of data (which you would access by setting up a server service (sorry, no pun intended) on the dual jacked computer.
I'm sorry if this is all confusing. But that's why 192.168.1.100 wouldn't work. You should have put your modem to 192.168.2.100 (which cannot exist on the 192.168.1.0 network) and restarted your N-Router so that it would detect the difference in the default gateway IP and connect.
Router = connects two networks, keeping them separate
Bridge = combines two networks into one network
(Anyone that's certified in this, please correct me if I have my facts wrong.)
EDIT2: if you want to read up on your own:http://en.wikipedia.org/wiki/Network_bridgehttp://en.wikipedia.org/wiki/Network_routerhttp://en.wikipedia.org/wiki/TCP/IP_protocol_stackhttp://en.wikipedia.org/wiki/TCP/IP_model