[TriLUG] attack

[cate serino]

Hi,

After only having my server up for a few hours and to a state that I
thought was fairly secure, I got hacked with what I think is a man in the 
middle attack.  Other than turning off ports (telnet, ect.), changing
root passwords, and editing the hosts.allow and hosts.deny files, what
can I do to secure my server.  I noticed that he/she was able to run
ipchains and filter through his/her ip.  In addition, the he/she was able 
to mount a filesystem on my machine. I have flushed the ipchains and
unmounted the filesystem.  Am I missing anything?  I have not had my
server up for a year.  Has the Internet become that bad in one year? 

Many thanks,

Cate Serino