There are levels of security.
First step is probably to get familiar with the basic firewall/router software.
Netfilter/IPTables is the "new" (as in >= 2.4 kernels) interface for both firewall's and routers. There are a billion GUI tools available to help you configure it, but it is also quite simple to write a little script to install the rules you'd like to use.
Iptables/Netfilter works at a kernel level to provide the best level of security for your network interfaces.
Now.. that will help you keep people in or out but it is only really the first step for security.
I follow the following guidelines at all times (yes, I'm a little security nuts):
1) Use a umask of 077. What this means is new files created by users will only be readable, writable, or executable by the user that created it.
2) Use ACL's. Starting in the 2.6 kernel we have kernel support for Access Control Lists. These allow a finer grain of security over the usual user, group, other permission bits.
SuSe has a paper about ACL's in Unix and specifically in Linux.
3)
Grsecurity/PAX enabled kernels. This is yet another step towards "hardening" your linux experience.
4)
SELinux is another security system. It provides policies for further locking down your system.
5) NEVER NEVER NEVER run a server daemon as root. If you are running a server daemon as root, and a security hole is exploited in that daemon, then all your other security could be for not, as an attacker could have just gained root access to your system. If there is an exploit and the daemon is running as another user, the damage that can be done is very much limited.
6) chroot jails. I don't use these on all my systems, only the ones that I allow people shell access to. If you want to consider this type of security google for chroot jails and user jails, there is lots of good information out there.
I'm sure that a lot of this is way more then you wanted to know, but I just wanted to give you a bit of an idea about what is out there. Remember, none of these things on there own are a complete solution. The only way to truly be secure is to use several of the security technologies in conjunction with each other.
