802 QOS/ Bandwidth Control

My question is such:

I want to control the bandwidth of my users and cap there speed on the network. I was told by a Cisco rep that it is better to police or control the bandwidth at the switch and not via the router. It that the correct place to control bandwidth at the switch or would it be better to control it at the router? Secondly, by policing or control the bandwidth via 802 QOS on a GIG switch will that also cap the speed of the individual ports on that GIG switch to the speed on the QOS settings? Example - I want the QOS setting on the switch to be capped at 256kbps and it is a GIG port. Will local traffic be transmitting at 256kbps and defeat the purpose of the GIG speed on the port. I hope that I said that in a way that is easily understood.

T1/ISP Router                         
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Proxy Server(DMZ)                                 
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Cisco 2811 router/Firewall----------------DSL/Router
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   |                                    Dell Switch 
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3com Switch/Dell Switch               VLAN 10/192.168.5.0
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   | VLAN 2/192.168.3.0                      |
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   LAN                                      LAN
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Employees                                 Guests