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Load Balancing

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hi:

Currently i have a network running squid as a transparent proxy server
serving around 500 users. Around 40% of the users ie ( 200 users) use
the network and the performance is good with very very little
problem.. now my network is about to increse and almost 1200 Users
will be using the proxy server. Presenly i am running a PIII Xeon
processor Server with SCSI Hard Drives and 1GB of RAM. Now i need some
suggestions for 1200 users.

Do i need to:

Upgrade or Purchase a new server OR use load balancing using 3 or 4
another servers OR just tune the currnet server for the best
performance.

What is the best option for my case assuming 50% of my 1200 users(ie
600) will be using the internet at the same time..


Thanks
Paras.


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