"I've read posts about if you use your own Router it breaks Sky's T&C.
Could I use the Sky Router for a PC downstairs, and use my own Router for a PC upstairs (without breaking the T&C) ? "
You would need two separate bb connections to use 2 routers.
"Even if you just used your Router only, could Sky find out and take action and stop your broadband service ?
Would you be forced to pay for the remaining months of service ? "
Yes they could find out you were not using their router. Yes they could cancel it, I would assume yes for the remaining contract. However bear in mind, Sky's router was fundamentally flawed and there have been known issues with it from day 1. Many people have resorted to use their own routers to get a working connection and so sky would be foolish to act on it now.
"Do Sky throttle Bit Torrent connections ? "
Only on the Connect Packages
"And one final question, if I got the unlimited package, how much could I download per month and be classed as fair usage ? "
The cap is rumoured to be 250gb - totally unofficial - and has never ever been enforced.