I stand by what I said. Routers/firewalls that are properly designed and implemented using NAT, by default, will not forward local traffic UNLESS YOU tell them to. Even if it 'leaked' out by error in design, the IETF RFC tells the ISPs/carriers to discard traffic that use reserved/private addresses. It is a two part design. There's the electronics for switching and a HUGE amount of software/firmware. http://kb.netgear.com/app/answers/detai ... -firewalls
You did not reference what "Linksys said", so I cannot comment on that. For one second, let's think - if it really was as you suppose, wouldn't a lot of people be yelling and screaming?
Its actually simple enough to test. Set up a router, plug the wan side into a switch, run another patch cable to your 'source' DSL modem, whatever. then hookup a PC on that switch with Wireshark installed --- listen to the traffic.
There is a case where your ISP 'could' see your traffic, and that is if you have plugged your PC directly into an ADSL modem/router without a pure IP router in between. Note I said 'could' - that is because it would depend on how that ADSL Modem/router was set up. In the case of ADSL, you are connected as if you were a part of the ISP's own network, using a technology called DSLAM (Digital Subscriber Line Access Method). The DLSAM in your telco's C.O. effectively retimes your traffic and places it on a dedicated circuit, and there's almost zero latency between you and your ISP. Your PC is working as if it were a part of their network. Cable Modems work on the same principle, but with different media.
Short version - If you have a pure IP router between you and the internet, and it is properly designed - no one can peek in.
You can even make PC's into pure firewalls. Microsoft has a server/appliance just for that. There's also open source software for that.
You are welcome to think/believe anything you want.