From my experience you can do a lot more hits with that type of machinery, although this depends on a lot of factors, and also strongly on the squid configuration.an ISP network with 500 users I have a pentium 4 Dual Core + 4 GB ram + Sata 2 160 GB Squid 3.1.xx + bridge + tproxy + Centos 5.4 64 BitsHow many hits are you specting hits/min if under 200 hits/min then you are okay (as my experience has shown me)
JC