Thank you all for your help. Responding to cctvqueen- I do not have cat 5 cable preinstalled in my house. Here in UK we have concrete walls downstairs and hollow plaster walls upstairs. So I intend to run a cat 5 cable up to the loft from my router downstairs, use a switch in the loft with a networked pc that stays on all the time.(this prevents fan noise from irritating us as well)
I am keen on using wired systems as the reliability of my wireless network worries me a bit.
Last but not the least, my budget is about £250. I think although IP cams would be good, I could get cheaper normal cams and let the software provide internet access to cctv images should I need to see them remotely.
By the way, thanks to JMANOFNVS for the suggestion about the T- splitter. I just wasn't aware of this little innovation.
Thanks all, you are a great bunch of guys. I think I could manage this myself now. Will let you know once its done. Any more suggestions are of course welcome
Cheers!