whitewinterwolf answer says
the circuit level gateway CHANGES the source ip address of outgoing packet(from the internal network point of view).
Two different TCP connection are formed, inbound and outbound.
I didn't get what Adi was trying to say. The example was cool but it didn't make any sense later on to me.
Yuri says-:
application level gateway can look up to all layers of OSI model whereas circuit level gateway only look up to network layer.
Makes sense indeed. but I've seen people saying circuit level gateway is more powerful than application level gateway. Plus the order in which they teach also would mean that circuit level gateway is better than application level gateway.
so I have confusion(and what I have learnt)-:
Application gateway opens 2 TCP connection inbound and outbound and so does circuit gateway.
Application gateway just authenticates with username and password but circuit level gateway does not authenticate(then how does it trust the incoming and outgoing users), it is confusing.(or does it authenticates?) Many books are signaling it doesn't do it.
Application gateway doesn't examine the content(like packet filtering) and neither does circuit level gateway afaik.
only one difference that I have found is that application gateway doesn't changes the source IP address of packet but circuit level gateway does. so somehow circuit level gateway is transparent.(and the ones I told above)