http://aacable.wordpress.com/2012/01/11/howto-cache-youtube-with-squid-lusca-and-bypass-cached-video...

Original Article:

"In most part of the world, bandwidth is very expensive, therefore it is (in some scenarios) very useful to Cache Youtube videos or any other flash videos, so if one of user downloads video / flash file , why again the same user or other user can’t download the same file from the CACHE, why he sucking the internet pipe for same content again n again?
Peoples on same LAN ,sometimes watch similar videos. If I put some youtube video link on on FACEBOOK, TWITTER or likewise , and all my friend will watch that video and that particular video gets viewed many times in few hours. Usually the videos are shared over facebook or other social networking sites so the chances are high for multiple hits per popular videos for my lan users / friends.

This is the reason why I wrote this article. I have implemented Ubuntu with LUSCA/ Squid on it and its working great, but to achieve some results you need to have some TB of storage drives in your proxy machine."