Your Answers
1) The LAN connection is the connection between your modem and your computer, thru a LAN Card. Since you LAN Card and your modem supports LAN speeds of 100Mbps, it means that you can transfer your data from your computer to modem at this rate ( Yes only to MODEM). Us say aagay , wohi speed milay gi jis par tumhara modem tumhari ISP say connected hai, which is 1Mbps over here. So basically when you use this connection 99Mbps of the bandwidth between your computer and your modem ( not ISP) is not utilised. Its like back it old days when you use to connection to ISPs using 56 Kbps modem, you used to get connection speeds on 115.2kbps, which was ACTUALLY the connection speed between your computer and your modem. The real connection speed ( the speed at which your modem is connected to your ISP ) in Pakistan on dial up has never exceeded 44Kbps as far as I know.
2) 26Mbps is the maximum speed your modem can support. That means that if your ISP increases your connection speed you dont need to change your modem as long as your ISP is providing your with a speed below 26Mbps ( The connection between your modem and your ISP). This has nothing to do with 100Mbps lan connection that you are getting.
3) Yaar tum nay in plans ki fee dekhi hain???. 2188 dollars /month for 1Gbps connection. These speeds are very much possible. Its not your traditional connection . Its Fibre Optics. Fibre Optics par to already multi-Gbps of data possible thay, to you shouldnt be surprised. There are techniques such as GPON which have made it cost-effective for companies to provide Optic Fibre solutions to people. 1Gbps of connection is too damn expensive so i dont think many people will be able to afford it ,but 100Mbps is very very realistic optics specially in JAPAN. When UK was giving out connection of 512K, 1Mb and 2Mb, Japanese were already selling 24Mbps or higher connections. UK now provide 12Mbps, so you can think about 100Mbps connections in JAPAN.
Anymore queries??... Ask me.