I have a module that requires an Ethernet interface.
Do i only need a PHY transceiver such as the KENDIN KS8721B PHY transceiver and a RJ45 jack?
There's this thing called a single port (surface mount) magnetics. It's gotta do with line isolation? Do i need it or is it optional?
Ethernet communications are typically modeled as consisting of several layers. Towards the bottom of the layers is the PHY interface. While I haven't looked up the device that you referenced, the PHY chip will be responsible for handling the low level signal receive and transmit in addition to things such as ascertaining what speed of network it is connected to. On top of this is a layer that is responsible for breaking the messages into packets (and receiving the packets) generating and decoding the checksums, etc. This functionality may be implemented in this hardware or it may be delegated to a higher level control. On top of this, you have protocol systems for the connections andfor the application data transfer. The devices that you need will depend on what level of functionaily you are tyring to implement. It is a pretty safe bet, however, that you will need a lot more than a PHY chip and a port jack.
Regarding the magnetics. a transformer will block any DC signals, providing a DC isolation between the controller and the network. This is necessary because of a lack of reference potential between the networked elements. The transformer will still pass the AC or changing signals which compose the communications.
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