routing / firewall question

[hanasaki]

the network is

Internet <=> firewall Linux with two NICs
firewall <=> internal network


The internal network has hosts with the following:
hostA - one NIC
	smtp
hostB - one NIC
	http/https
hostC - one NIC
	dhcp server
hostD - one NIC
	squid http proxy : port 8080
	privoxity http proxy filter : port 8081
	privocity forwards to squid
	squid sends to the outside world
	should the order be swapped? why? why not?

The dhcp server tells clients to route via hostD

how can hostD be setup so that it is a transparent proxy?  Currently all 
clients set their http proxy to hostD on the privocity port.  I know 
some IPtables rules will be needed on hostD but dont know what to set. 
Will routing rules need to be set on hostD? what are they?

thanks