Homeland Security giveth, and Homeland Security taketh away.

When the new Department of Homeland Security suggested on its Web site (www.ready.gov) in February that home first-aid kits should include potassium iodide tablets, it sparked a sales rush of historic proportions for the folks here at Natural Balance, a maker of health and diet products.

"Potassium iodide had been a moderately successful product for us," says a smiling Scott W. Smith, a Natural Balance vice president. "Then it skyrocketed. We sold a million tablets in one week! It's become the best-selling product in our 20-year history."

But a half-hour's drive south, in Colorado Springs, nobody is smiling at the headquarters of Apogee Components, a maker of model rocketry supplies for schools and Scout troops.

"We've been tearing our hair out since the Homeland Security Act passed," Apogee President Tim Van Milligan said. "This law treats model rocket fuel as an explosive. You need a criminal background check now to use our product. It's an absolute disaster for this industry."

The threat of terrorism, and the government's response to it, have had broad repercussions for big business -- from a flood of red ink for the beleaguered airline industry to significant profits for major electronics firms that make screening and surveillance equipment.

The battle against domestic terrorism has also touched tens of thousands of small business concerns, for good or ill -- and prompted furious lobbying battles over the new rules and definitions emanating from federal agencies dealing with various aspects of homeland security.

The contrasting experiences of Natural Balance and of Apogee Components, two small firms located in nondescript industrial parks on the eastern slope of the Rocky Mountains, reflect the diverse impact the new federal effort has had.

Natural Balance, founded in 1983 by a Castle Rock couple who blended herbs and vitamins into an "energizer" tablet called "Pep," has become a familiar name in health food stores from coast to coast. The firm makes diet pills, colon cleansers, herbal tranquilizers and such.

Last October, said Smith, vice president for corporate development, the firm noticed that the federal government was supplying potassium iodide tablets to postal workers and certain other federal employees as a precautionary measure in case of a nuclear alert. Doctors say the chemical tends to reduce the thyroid's absorption of radioactive iodine, a dangerous byproduct of nuclear release.

So Natural Balance started selling the product under the name "No-Rad," packaged in a bright red-and-white box with a prominent notice on both ends: "Warning: Use only in the event of a nuclear emergency!"

"We had a problem initially," Smith recalled, "because we had to educate our retailers and their customers about what this product is. It went slowly at first. But [Homeland Security Secretary] Tom Ridge took care of that."

In February, when Ridge first raised the national security alert to Level Orange, www.ready.gov issued a series of advisories to help Americans prepare for the worst. Most attention focused on the recommendation for sealing a "safe room" in the home with duct tape and plastic sheeting.

But the Web site also mentioned potassium iodide. Although the official endorsement was somewhat lukewarm -- "Potassium iodide may or may not protect your thyroid gland from radioactive iodine exposure" -- it was more than enough for Natural Balance and several other firms marketing the tablets.

"Sales have just exploded," Smith said.

In the model rocket business, in contrast, there is broad concern that sales will drop sharply because of new security rules restricting the use of ammonium perchlorate composite propellant. APCP is the solid fuel that drives rockets skyward, and it has helped countless Boy Scouts earn the Model Rocketry merit badge.

Under last November's Homeland Security Act, the shipment and sale of any rocket motor with more than 62.5 grams of APCP will be strictly controlled. That's a fairly large motor in the model rocket game, so the rule will not impair sales of smaller rockets.

But as students and hobbyists move up to bigger models, such as the five-foot-long replica of the Saturn V moon rocket that Apogee sells for $225, they need bigger motors -- motors now officially considered "explosive devices."

The Bureau of Alcohol, Tobacco, Firearms, and Explosives points out that 90 percent of rocket motors on the market would fall below the control limit. The agency says the new rules will help "to better monitor explosives commerce in an effort to enhance homeland security."

"What this has to do with terrorism or security is a mystery to me," complained Van Milligan, surrounded by balsa nose cones and control fins at the Apogee factory. "It ought to be obvious that we don't want anything explosive. We put, maybe, a hundred dollars, and dozens of hours, into making our rockets. We definitely don't want them to explode. The fuel we use will not explode."

The model rocket community has gained the support of Sen. Mike Enzi (R-Wyo.), a former rocket hobbyist. Enzi last week launched legislation that would exempt students and hobbyists from the federal regulations, which are scheduled to take effect May 25.

The problem, he said, was that the drive against terrorists has been expanded so far it will block the legal activities of innocent Americans.

"We should be encouraging youth to take up this mind-expanding activity, not squelching initiative," Enzi said. "People who build and launch model rockets for fun aren't the bad guys."

Tim Van Milligan of Apogee Components said sales of larger model rockets will be hurt by new rules restricting the use of rocket propellant. Scott Smith's Natural Balance health foods firm got a boost when the Homeland Security Web site mentioned potassium iodide tablets.