What is NAT (Network Address Translation)?
All necessary IP address translations occur where the LAN interfaces with the broader Internet. NAT converts the packet headers (and in some cases the port numbers in the headers) for incoming and outgoing traffic and keeps track of each session.
This does mean, however, that NAT overrides "Internet transparency", a practice in which packets remain intact throughout their transmission. NAT is also provided with Windows Internet Connection Sharing.
NAT accomplishes these key purposes:
•It acts as a firewall by hiding internal IP addresses.
•It enables an enterprise to use more internal IP addresses, since there is no possibility of conflict between its internal-only IP addresses and those used by other organizations. Essentially, an organization can present itself to the Internet with fewer IP addresses than used on its internal network, which conserves public IP addresses.
•It allows an enterprise to bundle multiple ISDN connections into one Internet connection. </div>