VLAN - a semi-firewall related question

["Ivan Fox" <ifox100 () hotmail com>]

It is a semi-Firewall related question.

A firewall for the Extranet allows, say 10 vendors, contractors, to connect
to it.  There are two options that we can think of:

Option 1:
Have 10 NICs in the firewall.  This option is clumsy, but it is secure in
the sense that competitive suppliers cannot sniff each other's data.

Option 2:
A smarter approach, one says.  Have an intelligent switch connecting to a
NIC in the firewall.  Each port of the switch is isolated, a VLAN approach.
Competitive suppliers cannot "peer" into each other's data.

Being a non-router/switch guy.  How can I configure and secure the switch?
I have also heard a router guru mentioned  that, in order to provide
security, we should not use intelligent switch as someone connect to the
console of a switch, he/she can sniff the packets.

Any pointers are appreciated.

Thanks,

C.K.