Dmitry,

I am far from expert on establishing a secure server! However:

>>Where in my IIS would I enter the fixed IP address assigned to me by ISP?

You don't need to. DNS will direct domain traffic to your IP address. If it is browser traffic your firewall/router will be configured to send it to your IIS server. In IIS you provide a "default" website but you can also specify more than one domain sharing the same IP.

>>What is hardware firewall? Would a router be considered a good firewall?

Depends on the router. Apart from the obvious protection from the routing, most routers have additional firewall features these days.

>>What is NAT?

Best to look up "router NAT" on google for a full story. There is heaps of good stuff about DNS, NAT etc. Essentially NAT gives you "in-house" IP addresses behind the firewall that are inaccessible to the outside world unless you configure your router/firewall to allow it. For example, you could force all http:// traffic (coming in on port 80) to go to a specific server even if a hacker tries to access that port on your workstation.

>>How do you block incoming ports? And how do I know which ports are needed?

These days most hardware firewall/routers make it easy. Some come with common ports entered so you can simply enable/disable them. Some are obvious- for example, you'll want port 80 for http:// browsing and maybe 443 for https:// access. Those will need to go to your IIS server obviously. If you host your e-mail server in-house you'll need port 25 for SNTP with the router sending that to the right server. In that case you need to make sure you configure your e-mail server to prevent open relay (you MUST look that up in your e-mail server's system!) or spammers will use your e-mail to send their junk and you'll find yourself added to the "banned" lists.

Take a look at the linksys and d-link sites for good cheap firewall routers. Also browse around in google, there is lots of experience out there and people taking about their hardware and how to configure it.

Regards

j.R