The traffic between eth0 and eth1 will be routed only if you enable IP forwarding and use iptables to setup Linux as a router. You do not need two Linux PCs. A single computer with two network card can act as proxy and router.
|xp1
|xp2
|xp3
|
Lan switch
|
|
eth0
------
Linux Box
------
eth1 ---> Internet
Your Linux box can act as firewall, proxy and NAT device. It will protect LAN from the Internet problems and attacks.
How to setup Linux as a router for DSL, T1 line etc
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