I have a domain registered at GoDaddy.com. I have been hosting my website on my own Windows 2003 server with forwarding. It is working great. Now I would like to implement the next step: To secure the website with an SSL certificate. I have been told that this is not possible with forwarding. What is the best way to accomplish this? Also I am using a third-party Exchange hosting service for my email. Thanks.
For SSL, the initial port that the browser connects to must do the SSL setup. If you proxy to your webserver, the proxy must do the SSL to the client. It really depends what you mean by forwarding. If it is destination NAT, where the IP packet destination is modified, you can do SSL on your server. If it is proxying, you can't do SSL. If it is a HTTP redirect from your domain to your server on a different host, you might be able to do this, although it depends on the person doing the forwarding, and will probably involve two certificates. It might be easiest if you get DNS to point directly at your server if this is the case.
Comment with what you mean by forwarding and I'll try to expand my answer.
If you have a domain at something like yourcompany.yourisp.com, and godaddy are "redirecting" (not "forwarding") from another domain like yourcompany.com, then you treat is as if someone just sent visitors to your site from theirs -- you only worry about generating and using an SSL certificate for yourcompany.yourisp.com. If you have full control over the webserver at this site, it should be easy; make a CA, generate the certificate request, sign it with the CA, and use the key/certificate file(s) produced. If you only have the ability to put files on your website (but not to configure SSL etc.) then you'll need to talk to your site hosting provider.
Oh, I see from your comment to another reply that godaddy are setting up an IP for you. In that case, you probably have a very normal domain setup, where the IP actually points to your webserver. This is just configuring a CNAME or A record on your domain; not really forwarding, although godaddy may try to simplify it with terminology like that. You can verify what's happening by pinging (or doing an nslookup or a dig) to the website domain name that godaddy forwards for you. If it resolves to the IP address of your own webserver, then it's a normal setup.
If that's really the setup you have, then you just need to configure the webserver for SSL as usual, from many step-by-step instructions available online. The gist is, again, what I mentioned above: have a CA, generate a request, get the CA to sign the request, etc.