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I have a Linksys router that can be configured as a router or a gateway. Those are the actual two options in the configuration screen for the Linksys. By default it is set as a gateway and it is currently used as a NAT router to the Internet for a bunch of clients with private IPs. I am not clear on the difference between these two modes, particularly for this Linksys router. It seems to me that the Linksys is acting as both a gateway because it it the entry/exit point to the Internet for the LAN and at the same time it is acting as a router because of its NAT function. Any help?

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Gateway implys that it is what computers connect to it will use to get to the internet. It is the "gateway" to the internet. Router is generally used when it is just a regular router on the network going between subnets or something. Setting it to gateway might enable some extra features like the port opening/forwarding, firewall, etc but I don't know for sure. I have always just let them be gateways :)

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Tom's Hardware > Forum > General Networking > General Gateways, Routers and Firewalls > Gateway and router
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