Hi Kroney, welcome to the forum.
I hate to say this, but as far as I can see you've bought the wrong type of router. What you need is an ADSL router, which has an ADSL modem and router in the same box. What you have is just a router, with no modem.
There are two options; either get an ethernet-connected ADSL modem (quite difficult to find, but they do exist) and connect it between the telephone line and your router, or (much easier) abandon the WR641G and get an ADSL router to replace it.
I would definitely recommend the second option, and you may be able to sell the router to someone else. Models to consider would include the Netgear DG834G and the Speedtouch ST585.
As to your second question: yes, after configuring the ADSL router you can disconnect it from the PC and use it wirelessly. But it's generally best to use a direct ethernet connection when you are doing any configuration in the router.
Eric