Welcome to the Hardware Firewall Information Guide - Chapter - VPN connections:

At first, VPN means: Virtual Private Network. This is a "virtual" network constructed by connecting computers together over the Internet and encrypting their communications so that other people cant understand the communications. The benefit is that people can connect to the LAN from anywhere on the Internet. This allows easier connectivity and lower phone bills for travelling sales people. They just sign up with a national ISP and call local email POPs from their hotels as they travel the country and easily connect back to their company's secure local network.
Microsoft's answer to VPNs is PPTP. PPTP means Point to Point Tunneling Protocol. A technology developed by Microsoft, US Robotics, and others to enable Virtual Private Networks (VPNs) to work securely over the Internet without exposing their communications to intercept. It is currently available only to Windows NT and linux networks. As of June 2, 1998, security flaws have been revealed in Windows NT, which make it much less secure than previously believed. Security patches are expected.

How does a VPN connection work?

The following graphic shows how a VPN connection works.

As you can see a VPN connection is used in most cases to connect a branch office, using a SoHo (Small Office/Home Office) hardware firewall, to a secure company network using an enterprise firewall.

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