Hi Scott,
There isn't necessarily a definitve answer to your question. In my view it depends on the scale of implementation, cost, security requirements and technical expertise.
On one hand, you could for example combine everything into a Cisco Router for example, using a Firewall/Encryption feature set, Security Device Manager and even an ADSL card.
The router can be a sensible place to enforce security in a small environment, since it sits on the perimeter. It's also useful because it can support many types of WAN connections.
However, I find it generally easier to enforce & manage security on a firewall - the PIX for example (obvious really as a firewall is purpose built for this).
Also, in a larger environment a company will want to enforce their own security but often won't have direct control over the perimeter routers (provided by ISP).
I think you should try to experiment a bit, but for a small environment, such as you described, a firewall device with a decent GUI should probably provide what's needed.