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ok so in setting up a proxy server does this ensure that you can block websites or maybe what im asking is what does a proxy server do? Re route all traffic before going out to the internet? if thats the case how would i setup my route between proxy and win2003 server? just a forwarder? If not what the hell do i need to blobk sites?
Learning in progress..........

You block by either IP address, fqdn or part of domain name, or more advanced firewalling features.
A proxy is a "stand in". In the internet that means that a proxy server is a device that stands in for the normal connection to the internet. They can be used with firewalling features but they don't normally firewall other than ports.
You block sites with a hosts file or via IP address either in dns server or router function. Some proxy servers can block via that by rules. Linux is like that. To block sites if you use a proxy.pac you need to make a proxy.pac file that has what the hosts file has in it.
Might run a untangle, monowall or others They are distros that can be used. Run it from an old machine.
I read it wrong and answer it wrong too. So get off my case you peanut.

How can you block a IP address through DNS?
Also would you suggest buying a firewall program? Should that give me the ability to block certain sites and ports and IP's? I mean for now i can do it by ip :( i would rather do host name. And to edit the files on every computers host file dont sound like funAlso my server has like 7 or 8 IP's that it is using. I would assume this is the 7 or 8 root kits i believe they were that keep popping up. I delete them all and they come back. Well possibly they werent root kits, but whatever it was it says my server will go out to the internet and try to pull default ones.
Learning in progress..........

I might not understand your config.
You set bad fqdn'sip address to a warning html page or just localhost if you are using the server for dns to your lan.
Dunno specs on your proxy.
See documentation at untangle site or sonicwall site for more ideas. See maybe also pix at cisco.
Root kits are very difficult to detect and prevent. Best practices will help prevent them only if the entire system is clean.
See the best practices at the MS site for 2003 and xp. Consider harder security measures too.
I suggest that you do not connect your business computers to the internet. Get an old crummy computer for internet use. Use a live cd like knoppix or any live distro. Keep your business lan in no way connected. Prevent users from connecting it and limit all users privileges.I read it wrong and answer it wrong too. So get off my case you peanut.

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