My internet connection comes with a data usage limit. So I can make best out of it only by using squid caching proxy. How can I configure squid3 to work with Tor on ubuntu.
A couple of seconds googling gives tor iptables squid
The relevant comment being:
You can use the following configuration: user -> squid -> privoxy -> tor
The configuration of tor client and privoxy is standard. To redirect squid to privoxy you need the option cache_peer with never_direct parameter (see: http://www.visolve.com/squid/squid24s1/neighbour.php).
If your internet connection comes with a usage limit then no matter how you proxy/tunnel your still going to be using bandwidth and hit your limit.
When using tor for web browsing, you generally don't use it directly. You use a combination of privoxy and tor. This deals with the dreaded DNS leaks, allows you to do ad filtering etc. To make use of caching, insert squid between privoxy and your browser. So your setup would look like this:
your browser --- squid caching proxy --- privoxy --- tor --- Internet