DHCP-
Short for Dynamic Host Configuration Protocol, a protocol for assigning dynamic IP addresses to devices on a network. With dynamic addressing, a device can have a different IP address every time it connects to the network. In some systems, the device's IP address can even change while it is still connected. DHCP also supports a mix of static and dynamic IP addresses.
Dynamic addressing simplifies network administration because the software keeps track of IP addresses rather than requiring an administrator to manage the task. This means that a new computer can be added to a network without the hassle of manually assigning it a unique IP address. Many ISPs use dynamic IP addressing for dial-up users.
Every computer that connects to the internet needs an IP address (kinda like your home address) To get this IP address you either put it in manualy or more often the router provides the IP address automaicly the protocal that provides the ip is called DHCP
ETA: Your router has it, all the ones you buy today do. And more than likely your already setup and useing it.
Paul is correct but your probably useing
PAT which is a form of
NAT.There are a few certain IP address ranges that are reserved for privite use, and cannot be used on the internet. They are called non routeable IP address. These IP addresses are used on local networks. The way the firewall works is that the ISP provides you with a routeable IP address and the router takes that and uses that for its IP address, then it takes nonroutable IP adresses and assignes those to the computers that are connected to it. Basicly it alows multiple computers to use 1 routable IP address. They developed this to conserve IP address, it is estimated that if this wasn't developed we would have run out of IP address in 1996.
How is this a firewall? Well as far as the ISP is concerned you just have 1 computer connected to the internet where as you could have 2 or even 100s of computers useing that 1 ip address. If a hacker tries anything they are just trying to do something to the router not your personal computer. Giveing comands to a router when you think it is a computer isn't gonna work.
Thats basicly the idea, it does get alot more complex than that. Just be aware that this isn't considered a very secure firewall as there are ways around it if the hacker is smart enough. I'd recomend to go download zonealarm and use that too.