What is a Firewall: Firewalls protect you from being hacked or exploited. It is an application program that protects you from intruders. It inspects each incoming packet to allow only safe data to traffic. A great example of the need for firewall is the recent onslaught of MS Blaster virus which spread by exploiting a vulnerability. This worm spread to a PC just by exploiting a vulnerability and using the TCP port to infect. The moment you connect to the internet your machine could get infected by this worm.
Firewalls also let you control what programs can connect to the Internet from your machine and what programs could connect to you from the internet allowing complete control over what is going on in your PC. Especially requiring this kind of protection are machines which are permanently connected to the Internet using links like DSL (Digital Subscriber Line). When you connect to the Internet using these type of connections you are likely to be with a TCP/IP address for a longer period of time unlike PCs which dial-up and connect to the ISP (Internet Service Provider).

Not only for Hacking: Firewalls are often described as solutions to hacking. This is since they block TCP/IP protocol and render most TCP ports inaccessoble. However today due to other threats like worm which can infect a machine directly through a TCP/IP port its applications have widened.

How to Setup or Activate: In windows XP which is our primary OS under discussion in this guide, Service PAck1 and 2 versions provide firewalls. In service Pack 2 firewall functionaly is more feature rich. Firearll in windows XP can be enabled from control panel security center in Service PAck2 and from with networking in service pack 1.

Minor Inconveniences: One downside of installing firewalls are some of the legitimate programs that you would like to use, like Messengers or PC to PC phone call programs could stop working due to blocking of the TCP ports required for them to work. These are small nuisances and with the latest firewalls any program can be easily unblocked.

Information on Hacking..

What are the other options:
Zonealarm: Zonealarm is a well known name in software firewall. Go..

Mcafee : Mcafee has entered into firewall protection few years back. Their solution is comprehensive. You can chose to allow or disallow applications easily. Go..

Symantec: Symantec is another big name in this area. Their solution is comprehensive like others listed here. Go..

Microsoft & Linux:
New versions of both these OS has inbuilt firewalls. They must be enabled though this might demand some additional configuration for some applications.