Don't interpret the drawings in this article as meaning that you're defenseless if you don't have a standalone router or firewall between your LAN and the Internet. Even if you use a product such as Internet Connection Sharing from Windows 98 Second Edition to let one of your computers tie a modem to your LAN, you can still improve your network security.
Start by analyzing the threats:
The PC hosting the modem, ICS, and the network interface card (NIC) is vulnerable to attacks at all levels (refer to Figure 1).
The LAN itself is reasonably protected from attack by the Network Address Translation (NAT) function built into ICS; the LAN uses private addresses not routable on the Internet itself. Threats from servers back to client software are possible, as is access to content that you might choose to block in some circumstances.
The biggest threat is to the PC directly connected to the Internet; the answer is either to install a packet filter or firewall product directly on that computer, or to have your ISP install packet filter or firewall protection for your access.