What Is IPSec?

Internet Protocol security (IPSec) is a framework of open standards for helping to ensure private, secure communications over Internet Protocol (IP) networks through the use of cryptographic security services. IPSec supports network-level data integrity, data confidentiality, data origin authentication, and replay protection. Because IPSec is integrated at the Internet layer (layer 3), it provides security for almost all protocols in the TCP/IP suite, and because IPSec is applied transparently to applications, there is no need to configure separate security for each application that uses TCP/IP.
IPSec helps provide defense-in-depth against:

• Network-based attacks from untrusted computers, attacks that can result in the denial-of-service of applications, services, or the network
  
• Data corruption
  
• Data theft
  
• User-credential theft
  
• Administrative control of servers, other computers, and the network.
  

You can use IPSec to defend against network-based attacks through a combination of host-based IPSec packet filtering and the enforcement of trusted communications.
IPSec is integrated with the Windows Server 2003 operating system and it can use the Active Directory directory service as a trust model. You can use Group Policy to configure Active Directory domains, sites, and organizational units (OUs), and then assign IPSec policies as required to Group Policy objects (GPOs). In this way, IPSec policies can be implemented to meet the security requirements of many different types of organizations

From: Microsoft Technet Technical Documents