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I'm not actually using this private/public distinction anywhere since I don't have a mobile device, but the basic idea is that your private network is more "trusted" than some random public hotspot, and thus will export more stuff like fileservers that aren't needed on public networks.
The Steam client, however, isn't even a server -- it's a client. It connects TO the Steam servers, but cannot be attacked from other parties. As such, you can put it on the public network too.
At least I'm assuming Steam doesn't send your credentials in clear text: anything that goes on a public network CAN be intercepted by pretty much anyone, so anything that's even remotely confidential must be encrypted.
I don't know how well Steam protects against man-in-the-middle attacks, though. Public networks are inherently non-trustworthy, and you have to expect every (reasonable) kind of attack happening there. On a MitM-scenario, your connection to the Steam servers would be intercepted by a third party so you're really connecting to THEIR server, and their server would talk to the real Steam server. Using their box in between, they can do anything from just recording your communication with the Steam servers to maniupulating it in any way they want.
In theory, Steam should not be vulnerable to such attacks, but you never know.
So, there is the other criterion: if you aren't going to use Steam while you're travelling, you can just as well restrict it to private networks. On the other hand, if you aren't using Steam it doesn't matter whether it WOULD be allowed to connect on a public network, since you're not even trying to...
Rules set to Private are for when u have your Network set to Home/Work (Home=HomeGroup; Work=NoHomeGroup)
Public = Public Network!
As I said, that's up to you and your requirements really. If you use the private/public distinction correctly (read: nothing will prevent you from connecting to a public hotspot and telling Windows that this is a private network), this will prevent your Steam from connecting on, let's say, public hotspots. Public hotspots ARE a first class security risk, and if you're not entrely sure how well some software protects against various attack scenarios, limiting it to "private" is generally a good choice.
No idea. I don't care about the Windows firewall anyway, since all my boxes are on a LAN -- so the crucial node is the gateway.
Only reason to use Public network settings are when using public WiFi and u want to easily disable all forms of network file/device sharing.
If one says Private and other say Private, just uncheck the one you to not want and then check the one u do want.
For instance when u view the whole list of your Firewall rules; Steam should look like this.
Steam...........[X] Private.... [_] Public
Steam...........[_] Private.... [X] Public
If this is the case, simply change so they are both set to the same of what u prefer.
Such as:
Steam...........[X] Private.... [_] Public
Steam...........[X] Private.... [_] Public
Public is optional.