I am trying to add MAC Filtering in our network. From what I have read, this command will allow the MAC address to get through the firewall.

$IPTABLES -A INPUT -m mac --mac-source 08:00:46:99:CB:96 -j ACCEPT

First, is this all I need? Second, will I have any problems since I am also using NAT? Thanks for the help.

I think MAC addresses can be spoofed, so you should look at other security measures as well. And, in general, the more securiy, the better...

NAT, or Network Address Translation, does nothing more than translating IP addresses (ie hiding a computer's real IP address by replacing it with the NAT device's IP). Since IP addresses are located in a higher layer than the physical MAC addresses, NAT shouldn't interfere with MAC address filtering.
But try it and you will see...

I'll be honest and have not read about MAC spoofing. For right now, I believe it will suit my needs. I have a small network with 13 people out here in Iraq. The problem is people are letting their friends hook up their computers to internet they did not pay for. I just need something that will keep them offline. This is the simplest way that I know. I am currently running FC 5 w/ 2 nics as a router. I have a firewall to protect us as well as bandwidthd to graph traffic. I am working on installing bandwidth quotas ( rate at which people can download). The only problem I am having is I am running Firestarter (my firewall) which does not include MAC filtering. Can I flush out my iptables rules ( I am currently not even using iptables) and enable it and use it to do my MAC filtering? If so, how will this need to be setup? Will this cause a problem with my firewall?

Check out a tool called arpwatch.

iptables, as the name suggests, is a firewall that works on TCP/IP packets. MAC (or physical) network addresses are at a lower layer, so they shouldn't affect iptables.

I'm not using Firestarter, so I can't help you with that.