Is it possible to configure intervlan routing on a cisco 871 router ?
Should be. After you create your vlans in the database, you can create your interface vlan1, vlan2, etc. Then assign the addresses like you want, and assign each switchport to whatever vlan you want.
It depends. I think there may be a maximum of 2 vlans in the standard license. You can check like this (this is from memory, and I'm getting older :-):
Router(vlans)# vlan 2
Router(vlans)# vlan 3
At this point you would get an error. You can also possibly do a sh ver to find out how many vlans you're licensed for.
After creating your vlans, you create your interfaces:
ip address 126.96.36.199 255.255.255.0
no ip address
encaps dot1q 10
ip address 10.10.1.1 255.255.255.0
encaps dot1q 20
ip address 10.20.1.1 255.255.255.0
If you're going to nat, then you need to insert your ip nat statements inbound (ip nat in) on every subinterface that you want to nat.