I've seen a lot of posts on the Forums about securing your computer using various methods. What are the possible security implications if your modem itself becomes the object of a hack?

I use a Netgear modem router with SPI Firewall. It's pretty much a linux box with it's own Iptables. You access the modem via a browser running scripts. Once logged on you can set the features to your requirements. You can also telnet into it and access the linux directory directly. As with most modems you can update the firmware by downloading a file from the Netgear website. The downloaded file doesn't have a md5sum one can check and doesn't use a secure connection. There must be a possibility of updating the modem firmware with a torjan or whatever.

So if it's possible to compromise a modem/router, what sort of hacks could you do with it to compromise the computer or computers connected to it?