BEST PROXY SERVER FOR CYBER CAFE

A Proxy server would actually slow it rather down in this case. Nor caching is an issue, because with online games you have around 0% change that the cached data will be used again (Unless graphics etc.. are also send with the internet, but that's almost never the case).

Rather I would suggest to buy a second internet connection and make a bridge between them with Linux, so that for your intranet it's one connection, but it actually are two or more lines.

i would do the following:

1) build a router out of an older pc using pFsense, momwall, or some other that you are familiar with

2) move up to managed switches from Linksys, D-Link or other (do not use consumer grade components)

3) have your have your cabling professionally done and tested
         this last potion is not necessary but you would be amazed at the difference in data throughput and reliability when this has been done professionally as opposed to in-house

not the free solution you were looking for, but sometimes you have to spend money to make money.

cashcomp

THE PROBLEM IS INTERNET IS ALWAYS SLOW DOWN WHEN 30-40 PCs OCCUPIED ,
ESPECIALLY WHEN CUSTOMER PLAYING ON LINE GAME LIKE FEAR & WARCRAFT.

you probably answered your own question.. 'especially when customer playing online game...'

online games can suck 4-8k of bandwidth per player. for 30-40 players, you'd need probably at least a 3 megabit connection (*both ways*) for smooth online play.

if you're trying to do this on dsl, cable (both of which have limited upstream speeds) or a single t1 (~ 1.5mbit), you don't have a big enough pipe.

if you don't have adequate bandwidth then you either need to beef up the connection or take some systems off the internet connection (for single player or local lan play only).

if you have adequate bandwidth, then you need to go with either a managed switch, better router or even a hotspot gateway (a specialized router for cybercafe and hotspot applications, such as the dlink dsa5100) that has bandwidth limiting features. so you can limit the amount of internet bandwidth each pc can use. preferably something that's easy to manage so you can boost that limit when there a bunch of pc's not being used (or you could charge extra for a faster net connection, even).

First off..DO NOT USE A PROXY SERVER IF U WANT TO PLAY GAMES..
Online games will not work through a proxy..

U need to get a router which supports TRAFFIC SHAPING, also called Quality Of Service..to allot a maximum bandwidth to each computer..and a several megabit connection for 40 computers...