http://www.squid-cache.org/Doc/FAQ/FAQ.html
[root@ABIT root]# echo 1 > /proc/sys/net/ipv4/ip_forward
[root@ABIT root]# iptables -P FORWARD ACCEPT
[root@ABIT root]# iptables -t nat -A POSTROUTING -s 192.168.0.0/24 -o eth0 -j MASQUERADE
my rh9 box has a cable modem connection(eth0) and my local(eth1) ip is 192.168.0.1.
you'll still have to install the squid rpm, then edit /etc/squid/squid.conf
the link should contain enough to read about squid