From last 2 days i have been trying to setup a gateway on my ubuntu machine. I looked at this small howto in ubuntu forums, but didnt go though it carefully. Just today i realized that IP Masquerade is essential for setting up a gateway.

All i did was configured 2 ethernet cards and apt-get install ipmasq. Thats all.

see http://ubuntuforums.org/showthread.php?t=10131 for exact info.