Hardware required for a squid proxy/ squid guard install

What sort of spec would people use to proxy students from a currently 2Mb due to be 10Mb internet connection? I currently use squid on our intranet server, but that is about to be moved to windows (Don`t ask!) Therefore I need to install something which will take over as proxy. I have a rather memory short 600Mb 256Mb scsi server, or the more usual desktops which I could add plenty of memory to. Any advice? Thanks Rob Keeling