Depending on the type of DSL the modem should be bridged to allow the router to handle the WAN IP address. It will be either DHCP (auto assigned) by the ISP, or they give a static address that you will need to configure on the WAN settings page of your router. The IP they had you set (192.168.2.1) is the gateway IP/address of the router itself. This is how the computers access the internet using the router. It makes no sense that they had you change the third place holder to a "2"....as it should not make a difference.

Modem in Bridge Mode
WAN address via DHCP or Static
Router set to normal address of 192.168.1.1, (it really doesn't matter what it is set to as long as it is an internal address in the 192.168 range)
Computers set to automatically get their IP via DHCP from the router.

If that is all set there is no reason it should not work other than the ISP screwed something up.

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