Newer firewalls can filter traffic based on many packet attributes like source IP address, source port, destination IP address or transport layer port, destination service like WWW or FTP. They can filter based on protocols, TTL values, netblock of originator, of the source, and many other attributes.
Application layer firewalls are responsible for filtering at 3, 4, 5, 7 layer. Because they analyze the application layer headers, most firewall control and filtering is performed actually in the software.
References:
https://en.wikipedia.org/wiki/Firewall_(computing)#Network_layer_or_packet_filters
http://howdoesinternetwork.com/2012/application-layer-firewalls

Explanation
Promiscuous mode refers to the special mode of Ethernet hardware, in particular network interface cards (NICs), that allows a NIC to receive all traffic on the network, even if it is not addressed to this NIC. By default, a NIC ignores all traffic that is not addressed to it, which is done by comparing the destination address of the Ethernet packet with the hardware address (a.k.a. MAC) of the device. While this makes perfect sense for networking, non-promiscuous mode makes it difficult to use network monitoring and analysis software for diagnosing connectivity issues or traffic accounting.
References: https://www.tamos.com/htmlhelp/monitoring/