Can you give a little more context. I'm not aware of anything like that
from Microsoft. There is an external  connector for Windows Server which
is used when running WSS on the internet for non-employees and an
external connector  for SPS2003 for the same purpose.

Checkout
www.microsoft.com/.../external-connectors.aspx

We are using this company and we can't figure out if we really require this or
not from them:

www.fpweb.net/sharepoint-hosting/comparePlans.asp

click on "click to view more features" towards the bottom of the page, then
scroll to the bottom of the list. They have something listed called "WSS
External Connector." It seems to have something to do with Windows licensing.

This is what Microsoft has to say about it, but I'm not good at understanding
these things as I'm pretty new to all of this.

www.microsoft.com/.../external-connectors.aspx

This is what I understand from the referenced pages and from the "Client
Access Licensing" page at Microsoft:

www.microsoft.com/.../client-licensing.aspx

If persons who are not employees of your firm (external users) will be
logging in to your SharePoint site (CAL) (NOT accessing anonymously), you
will need either Client Access Licenses for each device or user, or you will
need an external  Connector (EC) to cover all external users. The hosting
service is offering to provide an EC for $195/mo as part of their
higher-tier services. I don't know whether the CAL approach is applicable
when using a hosting service.

I was interepreting it the same way. Our provider is
trying to pretend it's otherwise.