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Software Firewalls

Software firewalls traditionally run on top of your operating system. They tend to be more flexible and give you more control than their hardware counterparts (they're also less expensive). You can install a software firewall either onto the computer that acts as your Internet connection router, or on each system on your network. If you install Microsoft Windows XP, you get one automatically. Other options include Symantec & McAfee products.
What to look for when buying a software firewall:

Ease of use - A good software firewall should offer you an easy to use interface that lets you effortlessly navigate through your choices and guides you through the process of setting up your firewall.

Automatic updates - Your firewall vendor should also make regular updates available to you at a reasonable price, and if they're automatic all the better. Most vendors will give you at least a year's worth of updates for free, after which you will need to pay for them. Some vendors will even offer you updates for free for the lifetime of your product. It's thus a good idea to shop around and see what's out there.