At its simplest, a proxy server is a computer that accepts your requests for websites, makes the requests on your behalf (read: by proxy), and returns the results to you. With a proxy server, your Web browser never actually accesses any computers on the Internet. Web access is not all a proxy server can provide. Most proxy servers can proxy access to any Internet service. This means we can monitor FTP transfers and telnet sessions as well as Web browsing.. . .
At its simplest, a proxy server is a computer that accepts your requests for websites, makes the requests on your behalf (read: by proxy), and returns the results to you. With a proxy server, your Web browser never actually accesses any computers on the Internet. Web access is not all a proxy server can provide. Most proxy servers can proxy access to any Internet service. This means we can monitor FTP transfers and telnet sessions as well as Web browsing.Some programs like text mode FTP and telnet may, however, require special versions to work with a proxy. One advantage to this setup is the proxy server always knows who is attempting to get to what website. It can filter requests based on your rules and allow only a limited subset of requests to succeed, it can also log the sites requested by your users.

In addition to controlling access to the Internet at the application level, Squid can also "speed up" Internet access by caching pages you have already visited so they can be retrieved from your proxy server, rather than an Internet server. This provides a speed increase for two reasons:

1. It is very likely that you have a faster connection (Ethernet) to your proxy server than you do to the Internet (T1/DSL/Modem).

2. There is less traffic between you and your proxy server than there is on the Internet. This is especially true for Web pages on different continents.

The link for this article located at TechWeb is no longer available.