I did something similar to what is suggested in this IP Masquerade Configuration Guide
. I tested out the configuration by issuing the commands in an xterm window. Once I could connect to the "outside world" from a computer on the inside, I used the command iptables-save (this is a RH system, I am not sure if that if RH specfic) to put the commands in a file called /etc/iptables. My setup scripts use iptables-restore to reset things on bootup.
I used the 192.168.1.0/24 network range implied at this site,,, one can of course choose any of the range of ip addresses reserved for local use, with appropriate changes to the commands.
Note that if your kernel must be compiled with iptables support. I suspect most stock kernels are these days, but I haven't used one since RH5.2. There are a bewildering array of iptable options when building your own, some are certainly essential, some are nice, and some only needed for peculiar situations.
Have fun. I was really impressed with the ease of setting everything up once the kernel was OK. And that was without a GUI . You can setup DHCP for your local machines, but I just gave them static local IP addresses, felt no reason to complicate matters.