I am using Mandrake 10.0 (Linux distro.) GNU/Linux kernel 2.6.3-7mdk
(operating system), Linux squid (proxy server software) 2.5.STABLE4
and Linux gaim (instant messenger client software).

I need to know how to configure squid and/or gaim so that I can use
gaim through the proxy server.  Also, do I have to use some iptables
stuff?

This is what I've done in Fedora Core 4 with SELinux
(kernel-2.6.12-1.1398_FC4, squid-2.5.STABLE9-7, iptables-1.3.0-2,
gaim-1.4.0-4.fc4) and maybe will resolve your case too:

1. Include the desired IM ports in SSL_ports ACL and let Squid deny
others ports, i.e., edit the following line in /etc/squid/squid.conf
to include (1863 for MSN, 5190 for AIM/ICQ, 5222 for Jabber, ...):

 acl SSL_ports port 443 563 1863 5190 5222

Restart Squid.


2. Allow port 3128 (or the port you use in Squid) in iptables. In
Fedora we edit /etc/sysconfig/iptables to include the following line:

-A RH-Firewall-1-INPUT -m state --state NEW -m tcp -p tcp --dport 3128 -j ACCEPT

Restart IPtables.


3. Allow squid_connect_any in SELinux, i.e., execute in command line:

 setsebool -P squid_connect_any=1


4. Setup your account in Gaim to use your proxy (I guess this is the easiest part).