basically it's just a matter of going to
http://www.squid-cache.org/ and downloading the latest version of 2.5... then compile and install it... your best bet might be to use a pre-packaged binary, though... so try going to some package website and see if you can find a squid package for your distro (BTW, which distro are you using??)... after you have squid installed, it's (basically) just a matter of creating a nice
/etc/squid/squid.conf file and making some adjustments to your iptables rules...
http://www.google.com/linux?&q=squid+howto