firewall

Recently I got dsl and decided to have my linux box pass on traffic to
my windows box rather than buying a firewall. I did the research online
and figured out how to make everything work like I wanted. Is there
anything I've done wrong? Does anyone have any suggestions to improve
it? Below is what I put into rc.local including comments in case I
forget later what each part does. Wallace is the linux box. Ladmo is
the windows box. Thanks.

iptables -t nat -A POSTROUTING -o eth0 -j MASQUERADE
iptables -A FORWARD -i eth0 -o eth1 -m state --state RELATED,ESTABLISHED
-j ACCEPT
iptables -A FORWARD -i eth1 -o eth0 -j ACCEPT
# The 3 above allow for nat and forwarding to Ladmo. This allows me to
do stuff online from Ladmo.

iptables -A PREROUTING -t nat -i eth0 -p tcp --dport 40998 -j DNAT --to
192.168.0.2:40998
# Allows bittorrent clients on the net to contact mine.

iptables -A OUTPUT -o eth0 -p tcp --dport 80 -m state --state
NEW,ESTABLISHED -j ACCEPT
iptables -A INPUT -i eth0 -p tcp --sport 80 -m state --state ESTABLISHED
-j ACCEPT
# Allows me to surf the web from Wallace.

iptables -A OUTPUT -o eth0 -p tcp --dport 53 -m state --state
NEW,ESTABLISHED -j ACCEPT
iptables -A INPUT -i eth0 -p tcp --sport 53 -m state --state ESTABLISHED
-j ACCEPT
iptables -A OUTPUT -o eth0 -p udp --dport 53 -m state --state
NEW,ESTABLISHED -j ACCEPT
iptables -A INPUT -i eth0 -p udp --sport 53 -m state --state ESTABLISHED
-j ACCEPT
#allows dns to work on Wallace.

iptables -A INPUT -i eth0 -j DROP
#Drops unwanted incoming packets.
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