Network address translation
In computer networking, network address translation (NAT) is the process of modifying network address information in datagram packet headers while in transit across a traffic routing device for the purpose of remapping a given address space into another. Most often today, NAT is used in conjunction with network masquerading (or IP masquerading) which is a technique that hides an entire address space, usually consisting of private network addresses (RFC 1918), behind a single IP address in another, often public address space. This mechanism is implemented in a routing device that uses stateful translation tables to map the “hidden” addresses into a single address and then rewrites the outgoing Internet Protocol (IP) packets on exit so that they appear to originate from the router. In the reverse communications path, responses are mapped back to the originating IP address using the rules (“state”) stored in the translation tables.
This only applies to users of routers and not the standard USB modems. NAT is a means by which you can connect your network to the internet using ADSL without having to use “real” IP addresses (a “real” IP address being one which can be resolved by other machines on the Internet). Essentially it means that your internal network has a set range of IP addresses which are not “real”. This non “real” network then connects through a router which contains a means of translating the requests from non “real” IP addresses for real ones on the internet. This only affects those wishing to use an Ethernet based connection for their network and is all plain sailing anyway as the router has an easy setup menu.