Powerline ethernet adapters are not a brand new technology, but they’ve come into prominence with the need for high speed home networking because of gaming systems, cable and dish TV, and voice over IP applications which require fast network connections. Remember though, powerline ethernet adapters speed up your LAN, that is your local area network that comprises of your home. They do not speed up the WAN, that is your access to the Internet and the Wide Area network. If you have a slow DSL connection, or even worse, a dial-up modem, powerline ethernet will allow your home network to be fast, but will do nothing for your connections to the outside world.
Powerline ethernet aims to be plug and play. Ideally, you would simply plug in your first adapter into the outlet, and your second adapter into the second outlet, and connect your network cable to each of these adapters, and you would be ready to go. Fortunately, this does happen some of the time, but there can be problems with interference, different electrical circuits in the home, or some configuration issues if you set up your adapters for encrypted connections. Remember though, this is a consumer product, and the setup should work, otherwise technical support is available.
The speed you achieve with these adapters would probably be between 15 and 50 mbps. Advertised speeds are between 85 mbps and 200 mbps, though some gigabit powerline ethernet adapters are also being advertised these days. The speed becomes slower as interference or distance becomes an issue. Homeplug 1.0 is the correct standard to use, and though the homeplug alliance claims that manufacturers following its standard will be intercompatible, it would be best to not only choose the same brand, but even the same make and model of powerline adapter to make sure additional adapters are compatible. The reason I say this is that some specifications on products are mentioning incompatibility.
As compared to wireless technology, powerline adapters have some advantages such as better bandwidth, and better connections in large spaces. Wireless-N would be the only comparable technology to powerline connections, and the decision will depend on the specific situation. Some people will have poor wireless connections due to wireless phone interference, walls or other obtacles and will achieve great results with the powerline ethernet. As far as cost, it seems to me that wireless-n and powerline ethernet are about equivalent. If you have a laptop, or a cell phone that can use the local area network, you definitely want a wireless network.
But for two story houses, you can even have a combined approach. You would need a wireless router downstairs which connects to the WAN, and one of its ports would broadcast the ethernet upstairs using the powerline adapter. Your second powerline ethernet adapter would get this signal, and this would connect to a wireless access point. This would broadcast a wireless network in your second floor, and you could connect both physically and wirelessly upstairs (assuming your WAP had both physical ports as well as the wireless capability).