The squid3 deb that's available in the apt repos don't come configured with ecap support, which is required to support serving of gzip-compressed pages to clients.

In a network environment where the majority of traffic is wireless (like where I live), reducing the payload of internal network requests will have a positive impact on performance.

Follow instructions precisely at

You should use Squid 3.1.11 and ecap 0.03 even though more recent versions are available. I tried compiling with and ran into a bunch of make errors, where 3.1.11 compiled just fine.

The one step where I deviated from the instructions, was when configuring Squid. I used, instead, configure options which were closer to the original Ubuntu release. Here it is:

./configure '--build=i686-linux-gnu' '--prefix=/usr' '--includedir=${prefix}/include' '--mandir=${prefix}/share/man' '--infodir=${prefix}/share/info' '--sysconfdir=/etc' '--localstatedir=/var' '--libexecdir=${prefix}/lib/squid3' '--disable-maintainer-mode' '--disable-dependency-tracking' '--disable-silent-rules' '--srcdir=.' '--datadir=/usr/share/squid3' '--sysconfdir=/etc/squid3' '--mandir=/usr/share/man'  '--enable-inline' '--enable-async-io=8' '--enable-storeio=ufs,aufs,diskd' '--enable-removal-policies=lru,heap' '--enable-delay-pools' '--enable-cache-digests' '--enable-underscores' '--enable-icap-client' '--enable-follow-x-forwarded-for'  '--enable-arp-acl' '--enable-esi' '--disable-translation' '--with-logdir=/var/log/squid3' '--with-pidfile=/var/run/' '--with-filedescriptors=65536' '--with-large-files' '--with-default-user=proxy' '--enable-linux-netfilter' --enable-ecap

The last switch adds support for ecap.