7.8. ( MASQ and Dynamic IPs ) - Does IP Masquerade work with dynamically assigned IP addresses?

Yes, it works with either dynamic IP addressed assigned by your ISP via either PPP or a DHCP/BOOTp server. As long as you have a valid Internet IP address, it should work. Of course, static IP works too. Yet, if you plan on implementing a strong IPFWADM/IPCHAINS ruleset and/or plan on using a Port forwarder, your ruleset will have to be re-executed everytime your IP address changes. Please see the top of TrinityOS - Section 10 for additional help with strong firewall rulesets and Dynamic IP addresses.