The typical way to set up a transparent http proxy is to put it on a
separate machine near the ISP connection.  With LTSP, all the clients
are actually running browsers on the LTSP server.  Can I run the LTSP
server and transparent proxy on the same machine?

A quick glance through iptables doc suggests that it might be possible
because the OUTPUT chain can match packets based on the owner uid
(proxy).  I mention this because only the proxy should be allowed to
connect through port 80.  All other processes should get REDIRECT'd to
8080.

Has anyone gotten this working already?

-- 
A new cognitive theory of emotion, http://openheartlogic.org

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