Introduction.  Hubs operate in a fundamentally different way than switches.  Signals that enter a hub's port are indiscriminately repeated to the hub's other ports.  Switches read both the source port and the destination port of each frame and switch messages between the two.  

Historically, hubs have been considered to be devices that operate on layer 2 - the data link layer of the OSI Reference Model.  Remember, routers operate pretty much exclusively at layer 3 - the network layer.  Most switches still operate at layer 2 of the OSI model.  But more recently switches that operate on layer 3 and layer 4 are being used quite a bit more often.  This really blurs many of the distinctions between switches and routers.

It is important to remember there are going to be advantages and disadvantages for operating at particular layers of the OSI model.  For example, when operating at layer 2 switches/hubs don't need to dig as deep to get the location to which they should be sending the frames/message as routers do.

A broadcast domain is all of the devices on a network that are reached when a particular device sends its packets.  Hubs broadcast to all of the devices that are connected.

A collision domain is a segment of a network in which messages will collide if two devices transmit at the same time.

It is important to know, and not particularly common knowledge, that hubs don't operate as intelligently as one is likely to imagine.