Yes. All the other PCs (XP Pro & Suse Linux) at home share (via ICS) the modem on my main Win98 machine over a 100mbps switch at quite respectable speed.
With 56K the Net is so slow anyway that the network speed is less important.
Good advice about the FW - I use McAfee's Internet Security suite, but any reputable one will do. Just get all the ports and permissions tightened up.
Local Port Scanner from
http://www.JPSoft.dk is free and good.