Most people with half a clue (well, in a certain context: AKA people hacking/pretending they know the first thing about it) would know what 127.0.0.1 meant anyways =P
Anyways if you know your stuff, giving up your IP adress doesn't mean much. A Half decent firewall would stop 99% of anything, it's not the world's hardest task to get around it, but it'd take enough knowledge and effort that most anyone couldn't/wouldn't want to try unless you pissed them off that much, or you have something that they want that much. (btw, personally I dunno how to get around security myself, if you have half a decent firewall, I can't do shit to you =D ).
I'm pretty sure zonealarm has a free firewall you can use, try it, at first it's annoying with all the prompts and popups asking permission, but after that it's barely noticable that it's even running.