As a package, squid is already preconfigured to work. However, most distributions preconfigure squid to be extra safe. As a result, you need to open it up first. If you can trust all hosts on the LAN, then you should first locate these two lines in /etc/squid3/squid.conf:
#acl our_networks src 192.168.1.0/24 192.168.2.0/24
#http_access allow our_networks |
These lines should be uncommented and customized to your LAN network address. You can uncomment a line by removing the first # symbol on the line.
Also, the default incoming port for HTTP is set to 3128 for most squid packages. You can change that to something else. Locate the following line:
http_port 3128
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Then, change it to whichever port you want to use.
You can also change the amount of disk space squid uses. The default is 100MB. Locate the following line:
cache_dir ufs /var/spool/squid3 100 16 256
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Change 100 to whatever amount (in mega bytes) you want to use.
Squid is a highly configurable program. You should spend some time to read the configuration file. It has comments for every option, and even suggestions and recommendations.