I use utorrent, and do not have the problems you mention. What I do is cap the upload speed to 40 KBs ( ~50% of my upstream bandwidth). At this rate I can browse the web fine, and you only notice the utorrent when downloading big files. I regulary get 800 KBs - 1.2 MBs downloads on the torrents and I've seen it get as high as 1.6 MBs, thats at least 12.8 Mbs. My ISP is Virginmedia in the UK and I'm on the 20 Mbs service.
My router is a Netgear WGT624 V3. Maybe the problem is with the routers you have.
I did have problems with utorrents crashing the link to the ISP but this was the old ambit cable modem, which was not up to the 10 Meg service it was working on. Virginmedia sent me a new cable modem last year and now everything works OK. I have seen 2.4 - 2.5 MBs (i.e. 20 Mbs) downloads, but this needed a change to the TCP window size, and the RFC 1323 options enabling.
Try connecting the torrent machine straight to the cable modem so you can check if the router is at fault. If its still causing slow browsing then maybe the cable modem is at fault.
Rob.