Assuming my pc is fully updated with windows update, has updated norton internet security and firewall, is it ok to give my IP address to a couple of people to play games? Can hackers do anything with it?
It'll be fine: you have anti-virus and firewall which should protect you from most hackers. Besides, why spend hours trying to hack you and your dull run-of-the-mill home computer system when you can hack Microsoft and Symantec? (and Google). I guess you do not have a static IP address so your IP address will time out eventually.
Under most circumstances harm can only really be caused to a specific IP address by your if the victim has a Trojan Virus running on their system.
Have you tried GameSpy, though?