Network Address Translation (NAT), network masquerading, and IP masquerading are all terms used to describe rewriting packets as they pass through an intermediary networking device to appear as if they originated from that device. There are many NAT arrangements, types, and variations, but all operate along the same lines.
NAT confers two profound advantages on outbound network traffic:
• It permits internal networks to use private IP addresses as per RFC 1918 and handles incoming and outgoing traffic to make that arrangement work.
• It hides the details of internal network addresses, whether public or private — which explains the masquerading terminology used in the preceding paragraph.
There are several distinct advantages to this kind of arrangement. For starters, NAT insulates internal computers from external probes, keeping crime out like a security fence. At the same time, NAT enables many internal computers to utilize a single external network connection where only a single IP address is assigned. NAT originally began as a response to the IPv4 address space shortage but has proven useful in many other ways.
Sometimes, communications protocols can be sensitive to alterations in packet header data. NAT mangles the original data contained in a packet, which can disrupt certain types of security protocols that absolutely require a packet to pass from sender to receiver unaltered. This was the case for IPSec when it first arrived on the scene because critical portions of header elements were modified by NAT, upon which IPSec relied. As a result, connections failed, and trouble followed close behind. Today, such traffic is handled without much difficulty, thanks to innovations in how NAT works and how security protocols are used.
NAT can be used for load-balancing for connection redirection, as part of a failover design to establish high-availability, as a transparent proxy for content caching and request filtration, or to connect two networks with overlapping addresses.
Source of Information : For Dummies Windows Server 2008 For Dummies
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