Let's start with the basics. Throw away your old gloves and get some new gloves made specifically for bagwork. You didn't say anything about wrapping your hands but you also should get some hand wraps and wrap up before you start hitting the bag. There are other reputable brands, but here's a link to the Everlast bag gloves:
Bag Gloves from Everlast Boxing & Sportswear
and hand wraps:
Handwrap/Tape/Gauze from Everlast Boxing & Sportswear
I've got some of the EverGel glove wraps which are really cool. You wear them under your bag gloves or you can wear them alone for light workouts. Even if you go this route you need to know how to wrap your hands properly. Here's the basics:
The Proper Way to Wrap Your Hands
Now, lets talk punching bags. The thing the previous poster was describing is a double end speed bag (which looks like a ball with a rope on both ends). You can get a double end heavy bag, but in my experience it won't appreciably reduce the noise. Furthermore, if you want some sort of visual/tactile "feedback" from your punching the double end bag will reduce this.
You can also get a free standing heavy bag, which has the bag on a large post on a weighted base (which is usually filled with water or sand for even more stability).
I'm of the opinion, however, that you can't go wrong with a traditional heavybag. You can hang it from the ceiling but were I you I'd get one of the metal stands designed to accommodate a heavy bag and a speed bag. They'll cost you a few hundred bucks but take care of all of your bag hanging problems. It will probably also reduce the noise upstairs since it won't be connected to the ceiling at all. Here's the heavybag selection at Everlast:
Everlast Heavy Bags & Heavy Bag Stands from Everlast Boxing & Sportswear
Finally, don't get too hung up on how hard you're hitting the bag. Your technique, and following this technique consistently is far more important. Make sure you're throwing your punches properly--there was a lengthy thread on this here awhile back so do a search for it.