A traditional firewall is a specially programmed computer system that "stands" between an organization's LAN and the Internet. It is a security measure used by many companies to prevent hackers and other unauthorized users from accessing internal networks. The firewall computer is set up to monitor traffic and to keep unauthorized crackers from tampering with the system, thereby protecting a private network from a public network. Firewalls are also set up to protect the security of servers.
A personal firewall is software that is installed on an user's PC which controls communications to and from the user's PC. It differs from the traditional firewall in that a personal firewall will not protect any more than the one PC it is installed on (unless other PCs are sharing Internet connectivity via the protected PC). It is also different from a conventional firewall in the sense that permits or denys communications based on security measures, for example, your firewall program will prompt you each time a connection is attempted, and based on which sites you allow, it will remember your preferences and determine which Internet traffic you allow on your PC. So if you see an adware program trying to get through, all you do is deny it! Personal firewalls also provide a level of intrusion detection, meaning it will terminate or block connectivity when it suspects an intrusion is being attempted (by spyware, for example).
The term comes from firefighting; a firewall is a barrier established to prevent the spread of fire. Experts agree that a firewall is considered a first line of defense in protecting private information and for greater security, data can be encrypted.