As per my first post, Squid must be compiled with "--disable-internal-dns", and/or disable dns lookups entirely through squid.
Secondly, I searched back through the ortalk mailing list, and it appears you must have FF 1.1x, then in about
:config either find or add
and set the value to true.
That info was found here:
If you browse the same ortalk archives for Sept, 2005, you will see some discussion on squid and dns leaks.
There is also this tor wiki entry: