How do you Configure a Secure DSL Network?

MorganGoeller asks: "I have an old Pentium 200 w/128 MB of RAM that just got a new 6.4 GB disk, but doesn't have anything on it. I would like to set the new machine with RH 6.1 for either: a standalone file/network backup/pop/nntp/web server (mostly for internal use); a firewall/proxy server; or both. However, I am an intermediate Linux user and am not sure where to begin." Anyone with somehelpful hints or starting tips? Click below for the details.

"I have a home network consisting of 1 linux box (RH 5.2, too chicken to upgrade as I can't have it go down for an extended period); 1 win 98 box (for my wife to use AOL and MS-Office, don't ask) connected to the internet through a persistent 640K DSL connection through US West. I am concerned that my network may be at risk and would be willing (but not excited) to spend some time securing the system if necessary.

My questions:

1. With DSL and DHCP going through USWest's gateway is my system reasonably secure?
2. What is the difference between a firewall and a proxy server? What is the best one to use considering all network data MUST come through my DSL modem before any processing can be done?
3. Is it a bad idea to put other features (file server, etc.) on a system that is a firewall and/or proxy server?
4. How dificult is it to set up a firewall and/or proxy server? I rather like having the mail/news server on my linux box and don't want to give it up (particularly) but I don't often log in from outside the network ...
5. What kind of configuration would you use for this situation? Keep in mind that my wife needs her Win98 machine for work and I need at least one linux box for me (for email, shell scripting, running Matlab, Maple, g++, PERL, Web Programming, etc.)

Thanks,

Morgan"