i am using fedora core 4 as squid proxy server, my squid and firewll server is the same .
squid version is [squid-2.5.STABLE9-7]

i want to configure tarnparent proxy .
i have 2 lan cards eth0 internet ip,
eth1 : fake ip ( lan ip)

i have some questions regarding this..

with these lines in squid.conf (main lines)
-----------------------------------------
http_port 3128

httpd_accel_host virtual
httpd_accel_port 80
httpd_accel_with_proxy on
httpd_accel_uses_host_header on

acl lan src 192.168.66.0/24
http_access allow lan
------------------------------------

now pls tell me what will be the client settings (
as i am using no settings in browser + eth1 ip as gateway of client) is this ok or i have to add dns settings also .....

enabled ip forwarding in sysctl.conf
then i start the iptables with these rules

iptables -t nat -A PREROUTING -i eth1 -p tcp --dport 80 -j REDIRECT --to-port 3128

is this sufficient or i have to configure SNAT

is their any way to make this proxy tranparent without MASQUARD settings

The iptables rule is OK. You just need to configure squid as transparent proxy by editing squid.conf:
Put your eth1 IP address in the above line.

Sir This setting is not working in squid 2.5
[http_port <Internal IP>:3128 transparent]
works with squid > 2.5 versions ...

Tell me if i have to enter dns settings in client in transparent proxy .

When you use transparent proxy the dns requests are done by the clients and not by the proxy sever, so you have to configure your clients to use a dns server.
Usually you can setup a local caching dns server and configure clients to use this to speed things up.

Thanks a lot