Saw this a few years ago on Engineer.com, but I thought I'd mention it again now, as a lot of people ask me these questions:

This video gives a good overview of how the internet works - the router, switch, firewall, proxy, packets, servers...

Direct Link: http://www.isrl.uiuc.edu/~mwolske/lis315/goodwarriors.mpg

More: http://www.isrl.uiuc.edu/~mwolske/lis315/warriorsofthenet.html