I've recently gotten an always on ADSL internet conection and will be setting up a network so my dad suggested setting up a crapy computer so that if I get hacked it's the crapy one getting hacked and not a good one. The thing is, my dad is prone wacky ideas that will never work so I thought I would check here first. My questions are A)will it work and B)couldn't the hacker just get access to the network anyway and fubar one of my good computers
Assuming you're using a router to split the DSL like to other computers you already have a hardware firewall and are fine.
Honeypots are used quite a bit on large networks. There's not really much call for it on a small personal network, but no reason not to do it if you have a spare machine lying around. Google for "Honeypot Traps" or something similar and see what it throws up. What you have to remember is that this won't protect your network as such. The reason large networks generally use them is to track information on the people that are trying to hack the systems. Here's an article on building a honeypot system: http://rootprompt.org/article.php3?article=210 Let us know how it goes
Interesting idea but (apologies) probably fairly useless unless you're running an app which does not work behind a firewall. Assuming you're using a router it is probably acting as ahardware firewall and you would need to put the "open" pc what is technically known as a "DMZ" (Demilitarised Zone). The DMZ is essentially the equivalent of you plugging your PC directly into your Internet connection. It is completely unprotected and allows unobstructed access to your PC.
Overkill for a home network. Just get a good firewall, something that does SPI (Stateful Packet Inspection) and maybe even IDS (Intrusion Detection System). Then you can save that spare machine for UD or Folding..