Hello,
I think you can use 887 router as a Layer 3 Switch.
Create Layer 3 VLAN Interfaces for both VLAN 1 & 2 (Interface VLAN 1 will present by default)
interface Vlan1
ip address 192.168.9.1 255.255.255.0
interface Vlan2
ip address 192.168.1.197 255.255.255.0
Assign respective interface to respective VLANs.
interface FastEthernet0/3
switchport mo acccess
switchport access vlan 1
interface FastEthernet0/0
switchport mo acccess
switchport access vlan 2
interface FastEthernet0/2
switchport mo acccess
switchport access vlan 2
Give default gateway as "192.168.1.197" For VLAN 2 Devices & "192.168.9.1" for VLAN 1 devices.
I think it should work. But i am not too sure about 887 router.
Thanks & Regards
Prasanna Kumar Desireddy