|response 1: I'm using cat5 cabling and soon to be cat6 (I think thats what you where asking)|
You don't need to bother upgrading your cable. Cat5e is easily capable of 1000 Mbps. I wouldn't replace it unless there was a specific need to. I would recommend testing to ensure it's all punched properly and passes all associated tests.
Could it be my cat5 wire? or bad modem? or could a Y splitter be the problem cause the speed cap?
Cat5 wire, no. At least, not if it's wired properly and passes the tests.
Bad modem, possibly, that would have to be taken up with your provider.
IMHO, and based on my own experience, the issue is likely the providers, not yours. Which is to say, it's their wiring or equipment, not yours. However, getting satisfaction from them could be a long, slow and painful process.
One thing nobody else mentioned is that most, if not all, providers oversubscribe their segments (makes them more money right) and if you happen to be sharing a segment with a bunch of p2p music/movie/software pirates, well, a large portion of the bandwidth will be eaten by them.