I'm siding with Mr Mephisto on this one, charliex. Software firewalls, while inferior to hardware firewalls, will show almost no noticable performance degradation on SOHO networks. If you run a large network through one, while maxing the CPU or doing other strenuous activities on it, you will see degradation.
As for your comment about hardware firewalls having inferior CPUs - very true, but hardware firewalls are built from the ground up for nothing but firewall work, and as such have very high throughput backplanes. Therefore, you'll have better performance through a dedicated hardware piece (ie: Cisco PIX firewall) than you will with your old 500MHz desktop running Linux.
Anyways, the main discussion was with home networks - and that's been answered.
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