Bond,
This will explain all the 7 OSI layers and interesting..
http://www.webopedia.com/quick_ref/OSI_Layers.aspTo a quick note.
A Layer 2 Siwtch will work using the MAC address (Each card will have its own Ethernet Address coded into alpha - decimal chars)
e.g. IPX Protocal used by novel netware servers. Very hard to do routing.
While the layer 3 uses IP address.
Very easy using IP addresses.
If want to go more, just read man ARP also..!!
Chan