I just bought the RF550 and want to know how to set up the firewall. If I use the VPN connection from my portable computer, do I need any special software??

The firewall function is on by default. You need to go through the Wizard setup and configure all the basic settings.

Yes, you will need to use an IPsec client software on your portable computer. This software does not come with the router, you must buy this software seperately.