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Types of Fireswalls:

Packet Filtering Firewalls

This type of firewall focuses on detecting 'packets' and blocks all but selected network traffic. It is typically limited in functionality to filtering; thus you may not receive information as to the origin of the communications, internal users, time and file sizes transmitted and other statistical information.

Proxy Servers

Proxy Servers allow indirect access to and from the Internet by breaking the client/server model. Thus every client/server communication will require two connections, one from the client to the firewall (which acts as a 'proxy' for the desired server, and one from the firewall to the desired server). This system has the advantage of being able to provide detailed information, but scalability can be an issue.

Application Gateway

An Application Gateway provides the highest level of security possible and provides full application layer awareness without interposing a proxy server. It works by extracting the state-related information required for security decisions from all application layers and maintains this information in dynamic state tables for evaluating subsequent connection attempts. This provides a solution that is highly secure, offering high performance and scalability.

Products doing this include:
Check Point Firewall 1
Symantec Enterprise Firewall
Symantec Gateway Security
WatchGuard Firebox
Cisco PIX

CheckPoint uses a patented Stateful inspection technology which scans all IP communication at the network layer.

Information on each communication is stored in State Tables and is used to make security decisions based upon the Enterprise Security Policy.

A FireWall-1 Enterprise Security Policy includes everything a business or other organisation needs for network security, such as:

Access Control, Content Security, Authentication, Encryption (VPN), NAT, Auditing, High Availability and Router Management.

Check Point has centralized management capabilities which are critical in multiple firewall installations.

Network Address Translation:

NAT:
A method for translating internal IP addresses or network addresses into a single globally unique IP address. It permits a nearly unlimited number of users of one class C Network address because global addresses are required only when a user is connected to the Internet. It also serves as a fire wall by keeping individual IP addresses hidden from the outside world.

The NAT takes packets from the private network and re-writes them using one of its public IP addresses and sends it onto the public network (Internet). When the response to the packet comes back the NAT takes this inbound packet and redirects it to the private address that originated the traffic.