sdpiowa
So if I install DansGuardian, I have to set all the computers up to use it as a proxy, correct?
Without wanting to appear abrupt or rude (as some people seem to object to being told to read the manual), this is a classic case where your question is already answered.
I suggest you read the Dansguardian howto,
http://wiki.contribs.org/Dansguardianand
http://wiki.contribs.org/Dansguardian#Configuring_your_system_to_force_Dansguardian_usage_.26_prevent_bypassingas that mentions setting the Transparent Proxy port to 8080 in sme server, and enabling portblocking of 3128 & 80 to prevent bypassing, and that way all your workstations can use the (typical) web browser default setting of auto proxy detect, and web browsing will be effectively forced via dansguardian.
sme has a smtp proxy and a http proxy and they are used by default.
Your system "power" is barely adequate, but how well it runs will depend on usage. If you have high volumes of email and enable spam filtering and virus scanning then more processing power and especially more RAM will be needed.
For a small system with just a few users and low volumes, that spec will just run OK. More RAM is really needed though.
I ran a small office on a Celeron 500MHz with 256Mb RAM and a couple of 80Gb disks in RAID1 with about 6 users, for the last three years. It was slow when making server manager changes, but performed OK for everything else.
System spec really depends on your needs/demands/performance expectation/email & data volumes.