When a modem engages the telephone line (to use the Internet) is it possible for something such as a relay device to operate which disconnects all the other devices on the line, thus eliminating any interference from them while the modem is connected to the internet?

It is interesting that you should ask this question, as many internet users can experience problems with other devices on the same line as a modem (e.g., as some phones draw extra current from the phone line occasionally, causing the modem to drop-out). You can have a ‘mode 3 socket’ installed on your phone line which will do exactly what you say - it will isolate all other devices on the same phone line as your modem, when the modem is in use. You cannot buy these and install them yourself, you will need an Austel approved installer to do the job. Your best point of call is to phone Telstra. Their contact details are available on www.telstra.com.au/contact/directory.htm.