I use Mandrake 8.0 with iptables to perform masquerading and make my Linux box the gateway for other boxes on the LAN. All I did was install iptables (rpm is on the CD's or you can get the source and recompile the kernel as well) and then did:
echo 1 > /proc/sys/net/ipv4/ip_forward
iptables -P FORWARD ACCEPT
iptables -t nat -A POSTROUTING -o eth0 -j MASQUERADE
where eth0 is my external interface.
Once I knew it was working I placed them in /etc/rc.d/rc.firewall so they are done on startup. (you can make them excute on startup in otherways as well)
Following that you could also use iptables to act a firewall packetfilter to provide some security. Check the Security fourm for some tips. I basically studied the ipchains and iptables scripts posted there and adapted them for my needs