Nick
Lets deal with the easy questions first:
- no using loopback interfaces does not hinder performance.
- no using loopback interfaces on your end does not require loopback interfaces at the Verizon end. What is required is the the source interface of a tunnel must have IP connectivity/reachability to the destination interface address. It does not matter what kind of interfaces they are it only matters that there is IP connectivity.
Now the harder part to explain - what would be different:
- you would not have the public addresses in the 65.51.250.136 subnet on FastEthernet8 or GigEthernet0 and you would configure interface loopback1 and loopback2 (or whatever interface numbers you want).
- the tunnel configuration would not use tunnel source FastEthernet8 and GigEthernet0 and would use the loopback interfaces as source.
- putting the public addresses on the loopback interfaces makes a very subtle change in how the network works that may be a bit difficult to explain and to understand. With the public address on GigEthernet0 then the 871 and the Internet router are connected on a common subnet so the Internet router knows where the addresses are that you want to use for the tunnel source addresses. If you put the public addresses on loopback interfaces then the 871 is no longer connected to the Internet router on that subnet. And the Internet router does not see those addresses as connected. You would need to decide what addressing you would use to connect the 871 and the Internet router. And you will need to decide how the Internet router will reach the public addresses on the 871 (which would probably be done with static routes on the Internet router.
HTH
Rick
HTH
Rick
