This same configuration works on the Internet without modification. Standard security issues apply, as described in the Peer Web Services Installation and Administration Guide HTML documentation and in Chapter 3 of this book.
Peer Web Services is optimized for use as a personal information server for light duty, such as in a workgroup. It does not support the heavy use that can occur on the Internet.
Internet Explorer version 2.0 or later is the only HTTP browser that supports the Windows NT challenge/response authentication system. To accommodate other browsers, you must use the Basic authentication system, which is not secure. You must either use Basic authentication, which sends user names and passwords by using base-64 encoding (and can be decoded easily), or you must implement SSL (Secure Sockets Layer) on your entire site.