I've been trying for a while to get internet connection sharing to work using that tool in mandrake control center but I can't make it work.
If I try enabling it, it goes back to being disabled the next time I open internet connection sharing. I see in the log window that it tries to rename etc/drakgwdisabled to /etc/dhcpd.conf, but neither of those two files exist.
The NIC's work fine, both internally and externally.

When I start the computer it says that eth0 fails to initialize, but when I run dhclient eth0 it gets and ip-address and everything is fine.

Can someone help me out a bit?

Could it be that you think that the external nic is eth0 but it really is eth1 and vice verse? Just asking because once I spent an entire weekend debugging a similar problem that turned out to be as simple as that.

I wish it was that easy :-)

I've solved the internet sharing part by configuring shorewall manually, but eth0 still fails when linux is starting up.