Preferred Caching Method for the Web?

Leto2 asks: "I was wondering what the preferred way of setting up a local cache is. Since I'm low on RAM, and my computer swaps a lot, I installed a squid-proxy on a spare computer in my room. But now I wonder, would it be beneficial to use a squid-proxy instead of a Netscape/IE disk-cache in general? Are there differences between the caching-mechanisms that would make one preferable over the other."