Subodh

"Is there any difference between how PIX handles traffic inspection and ASA handles traffic inspection?"

As far as i know the pix and ASA handle traffic inspection in the same way in terms of pix v7.x code upwards and the ASA code. The ASA utilises the pix inspection code but also has additional functionality as well.

Have a look at this doc which gives a brief overview of the security devices produced by Cisco and deployment of them -

http://www.cisco.com/en/US/products/ps6120/products_white_paper0900aecd80282f76.shtml

Jon