Dedicated hardware firewalls are typically more reliable.
Easy to disable or remove.
Work independantly of associated computer systems.
Disadvantages over Software Firewalls
Install process is more demanding both physically and mentally.
Takes up physical work space.
More expensive.
Harder to upgrade and repair.
Software Firewalls
Advantages over Hardware Firewalls
Considerably cheaper or even free.
Simple to install and upgrade.
Requires no physical changes to hardware or network.
Ideal for home/family use.
Takes up no physical space.
Disadvantages over Hardware Firewalls
Software may crash or be incompatible with system.
Can be difficult to completely disable and especially remove.
software bugs may compromise security.
Can be resource hungry.
Incompatibilities with operating system.
Conclusion:
Now this is simple, if you want to significantly enhance the security of your computer system and/or network then the installation of a firewall is highly recommended. The decision of wether to use a hardware or software firewall is totally up to the user and hopefully the pros and cons above can help in the decision making. It is important to note that most hardware routers can also acts as a firewall and as an added bonus are great devices for sharing your Internet connection, so if you are sharing your Internet connection and are not using a hardware router it may be worthwhile to seriously look into it. However the bottom line is that whatever type of firewall is used it will, to varying degrees help prevent anyone from the outside connecting to your computer and causing damage in some way. While this is a priority for businesses most home users around the world surely benefit from the implementation of a firewall as one definitely provides peace of mind.