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What do I need?
For this to work you'll need two things. A local web daemon, and a hosts file.
The hosts file takes the names of servers sending you the ad banners and reassigns them to a different location. By using the setup described later, your computer will essentially connect to itself and request the ad banner which it would've otherwise retrieved off the internet. The web server running on your computer will instantly say the banner doesn't exist, and that'll be that. You'll notice the speed increase instantly. This feature is builtin to Windows 9x, NT and Linux (I'm not sure about Macintosh).
So all you really need to worry about is the web daemon. For Windows95/NT I highly recommend TinyWeb. You can download this great FREEWARE application (sometimes the best things are still free) from RITLabs. This tiny web daemon is about 70K (yes, thats 70 kilobytes) and can do almost everything the big servers can do from CGI to user authentication. It's really incredible what can be crammed into such a small executable.
You will also need a small amount of windows knowledge to complete the installation. All the steps for installing TinyWeb are on their home page or they are listed in the next page.