Well that was a fairly abysmal failure.
Ran the command
/sbin/e-smith/db configuration setprop squid Transparent yes
(with the yes changed from no in the FAQ to disable)
then followed up with
/sbin/e-smith/signal-event remoteaccess-update
which I assume restarts squid etc. (of course I'm probably assuming wrong)
Then to be entirely Microsoftian in my outlook

I rebooted. No-one is using the machine so no dramas.
The charge up faithful galeon (the home page is google and that was what tried to load) and we get.
ERROR
The requested URL could not be retrieved
While trying to retrieve the URL: /
The following error was encountered:
* Invalid URL
Some aspect of the requested URL is incorrect. Possible problems:
* Missing or incorrect access protocol (should be http://'' or similar)
* Missing hostname
* Illegal double-escape in the URL-Path
* Illegal character in hostname; underscores are not allowed
Your cache administrator is admin@
Generated Thu, 13 Jun 2002 19:50:42 GMT by bluntman. (Squid/2.3.STABLE4)
no go

I go back in and run the same commands except swap the yes for a no and it works again no reboot or anything.
Anything glaring obvious to you that I'm missing...
Dan.