What is a firewall again. It is a set of hardware and software that insulates your home network from the internet. Just as a firewall is used to keep a fire from spreading, the network firewall is expected to keep your local area network secure to a degree. Nothing is perfect. You can get all kinds of units to protect your network. The network modem in most cases will not protect you. You need additional hardware and software to do the job. Most people go and purchase the brand name plastic routers such as Buffalo, Cisco (aka Linksys), and a host of others from the local electronic store. Some routers are also supported by third parties so that you can get enhanced software for you router. Sometimes it is a matter of a simple upload to more complicated installs.
You can also build your own router with commodity off the shelf (cots) parts normally used in building any Intel based personal computer. In our case, I looked in the parts closet and found a two hundred megagertz Intel pentium one with one hundred and twenty eight megabytes of ram. Used a few spare one gigabyte network interface cards (nics). Of course we added the two gigabyte compact flash card and interface.
Firewalls can be setup in a variety of ways. For home use, you might just use one router. The way the router is set is defined by the networks it connects to it. The four most basic networks are red to connect to the wan (internet), green to connect to the local area network (lan), orange to connect to servers that connect to the internet directly, and finally the blue network for wifi so that it will be isolated from the wired network. It might look something like this:
Notice which side of the firewall the connections are made to the firewall. It has it's own inherent issues. Using a cots based cows (community workstations) as routers generally requires switches to support connections to the router. So you might have higher cost to build the network infrastructure. In a business environment, you may want to go a step further. In our case having purchased a Pogoplug to use for internet access which we are not real sure of it's security. So like business we wanted a multilevel routing and firewall that might look something like this:
it is oversimplified here, but notice now you have two different red and green interfaces, but the lan is much more separated from the internet. You can still reach the internet just as easy through both firewalls. You could even add a proxy server on the private internal network to filter what websites and etc can be accessed. So a business that intended to upgrade their desktop computers can use the older equipment as router equipment. That extends the life and the ROI (return on investment) of the older equipment.
To build the legacy router see: http://www.instructables.com/id/DIY-network-firewall-from-legacy-parts/.
Your back on the internet now and you have time to decide what to do about the router. The web interface allows that old machine to look like a fancy piece of equipment.