It is a very small Linux distrobution that runs on PC hardware... (mine is a Pentium 75, 32mb RAM, and two ne2000 ISA cards.) It uses a standard NAT procedure (One network card for external IP and one for local running DHCP.) It is actually quite similar to a standard household router in the way it works except it contains many more features then a standard router would and if you are Linux savvy it is much more customizeable. It has a very simple install and a nice web admin interface through secure http. From a home user perspective it is no different then a standard router minus the fact it is run on a computer and from a networking perspective it is a standard NAT.
It really begins to show its superiority when it comes to features, upgradeability, cost, and customizeability.
One of its excellent features is to have the ability to have three networks. One is the local, the other is the external, and one is a complete DMZ network seperated from your local. This, of course, requires three network cards.
Anyway... thats just a bit of info on the router and how it compares to a standard router in funcionality and operation.