for 256kbps 2GB is good, 4GB will load your network when your cache engine tries to refresh the contents.
If you have 512Kbps you can use 4GB
1Mbps is Great for 6GB
2Mbps will do great on 8GB, though all depends on what you are caching, and how long you are caching it
serving Dial up should no more than 8GB even you have 2Mbps. unless you have a bluecoat, cacheflow or
other hardware cache like cisco cache-engine and others, thus you will get ultimate caching, PNC-Box has
Great respnose in Caching internet contents, with 512Kbps we tested it with 30GB cache contents, and
Response was minimum 40% bandwidth gain.
All depends on policy you use on squid, and hardware you impliment.
Good Luck