ICS allows a Windows 7 computer to act as an Internet router, called the host computer.

The host computer must have an Internet connection (public interface) plus one additional network connection (private interface). Use the Sharing tab in the Properties of the public interface to enable ICS.

• Windows Internet Connection Sharing (ICS) with an analog dial-up connection: In this scenario, the built-in software in Windows automatically dials your ISP from one computer whenever anyone on the LAN wants to connect to the Internet. This is called demand-dialing.
• ICS with a broadband DSL or cable modem: The computer that hosts the shared connection uses a second LAN adapter to connect to a broadband modem. This type of connection might be always-on, or, if your ISP uses a connection-based setup called PPPoE, Windows will establish the link whenever anyone wants to use the Internet.

Read more about ICS at:
http://support.microsoft.com/kb/234815.