This report, the fourth in the "Falling through the Net" series, measures the extent of computer and Internet connection among U.S. households and individuals. The data, obtained from Bureau of the Census statistics and interviews with 48,000 households, show that digital inclusion is rapidly increasing--households with Internet access soared by 58 percent since December 1998; more than half of all households have computers; and individuals using the Internet rose by a third. Groups that have traditionally been digital have-nots are now making dramatic gains--the gap between rural households and households nationwide that have access to the Internet has narrowed; Blacks and Hispanics have shown impressive gains in Internet access; the disparity in Internet usage between men and women has largely disappeared; and individuals over the age of 50 experienced the highest growth rate in Internet usage of all age groups. Nonetheless, a digital divide remains--people with disabilities are half as likely to have access to the Internet as those without disabilities; the gap between the national average Internet access rate and rates for Black and Hispanic households has widened; those over the age of 50 are the least likely to be Internet users; two-parent households are nearly twice as likely to have Internet access as single-parent households; and rural areas are lagging behind urban areas in broadband penetration. E-mail is the most widely used Internet application; online shopping and bill paying are growing the fastest; low-income users were most likely to use the Internet to look for jobs; and schools, libraries, and other public access points continued to serve those who did not have access at home. (Contains 112 figures and 23 data tables.) (TD)