IPsec, a series of protocols used to protect IP traffic between two points on a network, offers confidentiality, data integrity, and high security through advanced packet encryption. It is commonly used for business VPNs. The two primary modes of IPsec are tunnel mode and transport mode, each with its own use cases and advantages. Tunnel mode protects internal routing information by encrypting the original packet's IP header, making it useful for protecting traffic between different networks. It provides a secure connection between two different networks separated by an intermediate untrusted network, such as the Internet. However, it has a greater overhead and smaller MTU than transport mode. Transport mode, on the other hand, retains the original IP header and is commonly used for fast and secure end-to-end communications, providing end-to-end security through authentication, integrity, and anti-replay protection. It has a larger MTU than tunnel mode but lower overhead. However, it has poor compatibility with security gateways and difficulty in implementing traversal NATs. To set up each mode, it's essential to know how IPsec negotiates packet security using the IKE protocol. Ultimately, choosing between tunnel mode and transport mode depends on specific use cases and requirements.