For my school, I recently installed Dansguardian web filter and Squid web proxy/cache. on the Dell desktop computer shown at bottom in this photo.The server is configured as an Ethernet bridge using Ubuntu’s bridge-utils package. That way, the machine is invisible on the network so I don’t have to reconfigure the clients behind the filter.
John Rucker’s howto install DansGuardian was incredibly useful and my primary source.
(Picture: Test Setup for Web Filtering Installation, Originally uploaded by mgolding)
Megan Hayes-Golding 
Good for you. I used these products a few years ago and quite frankly they are without peer. We use a commercial product that runs on Linux but if I knew more about transparent proxying with Squid I’d go back in a heart beat.
Thanks, Don. I’ve been really impressed with the setup. Traffic seems to run through the server relatively fast.
I found that the transparent proxy was extremely easy to configure, given the amazing documentation online. The trick is to know you’re looking for a package called bridge-utils.