For a very basic setup you need to edit the file /etc/squid/squid.conf and add two lines. First search for the second occurance of "Recommended minimum configuration and add an acl for your network below the acl CONNECT method CONNECT line
Code:
acl mynetwork src 192.168.2.0/24
Then search further down the configuration file for the line containing INSERT YOUR OWN RULE(S) HERE. Add the following line above the localhost access rule
Code:
http-access allow mynetwork
Restart the squid service. Set your browser to use port 3128 on localhost and try going to an external website.