The server on witch i setup Squid is connected to the internet(Router) via eth1 (I used DHCP to configure this. Since i dont know how to set Static IP and still browse the net).
Then the server(192.168.1.20/255.255.255.0) is connected to the client(192.168.1.48/255.255.255.0) via eth0 directly.
The client and Server has a good working connection.
i`ve configured the clients proxy settings on firefox to use the server's IP (192.168.1.20 on port 3128) and im using the same proxy settings on all protocalls. When i try to connect to the internet on client it says connection was refused and i must check my proxy settings.
Can anyone plz help me this is urgent!!

Check squid.conf's ACL's and verify squid is running on port 3128 (netstat -natp on the squid box).

ACL's is configured.
(netstat -natp) reply's EN 7921/(squid),
is 7921 the port number?

No, that'll be squid's pid, check the local address column to know which port it's running on and while you're at it, check squid's log files.
Probably somewhere in /var/log, it'll most probably give you a clue on what's going on

Ok that was helpful squid is using port 25 to witch i changed the client proxy settings on fire fox, but its still not working. why is squid using port 25 i thought the default port for squid is 3128 I did not change this yet.
How do i change it? (do i edit the /etc/squid/squid.conf file for new port settings?) and another thing those squid log files gave a warnings about no name resolution sever detected but nothing else that helped. i did not set up any name resolution servers or anything like that is it needed?
Thanks in advanced for your support!!

I very much doubt squid is running on 25. The output of netstat -natp should be like this:
the 22 tells you sshd is running on port 22.
Squid's port is set in the configfiles, yes.