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Software firewalls are fine, and as long as you understand the short comings of the Windows Firewall (The one in Vista is actually half decient) its perfectly acceptable.
Most routers no have built in firewalls advanced enough to keep a home or even office network safe if you close everything, once you start letting external traffic through thats where there danger it IE running a web site or mail server in your network that outside machines contact.
All Hardware firewalls are, are dedicated boxes that run software, its just the complexity of the software that differs.
Jen
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