If the firewalls IP is assigned through DHCP, then use masquerading (your rule looks fine).
In term of locking down the firewall, I would absolutely recommend changing the default INPUT and FORWARD policies to DROP. Also, I'd recommend ditching Redhats lokkit firewall and put together your own firewall script. You can use the rules you have currently as a guide. You're on the right track with the RELATED,ESTABLISHED rules although those don't have anything to do with forwarding.
If you need some HOWTOs, take a look at the netfilter website documentation section. If you have any questions about putting together a script, feel free to post a new thread, but you look like you're doing pretty well on your own so far.