Hey,
What do you mean by "What type of proxy"? It's just a normal HTTP Proxy (usually Squid or NetCache NetApp) which caches (stores) most small/frequenty accessed static media. So it's running on a machine that probably has lots of memory, lots of hard drive space, and a very fast connection. it's usually a good idea to use an ISP's cache server (they often force it transparently) so that certain cached content loads faster, but sometimes the cache servers are either A) overloaded, or B) shape the client, and C) keep outdated stuff (not normally a problem, you can just SHIFT/ALT+F5 to re-acquire where necessary) in which case it's better to avoid. I personally run my own linux gateway PC with a Squid proxy transparently intercepting HTTP traffic for my network, and an 80GB cache for it - there's lots of tutorials on the web which explain how to do this, and I strongly recommend it if you do a lot of browsing and want to save on your monthly cap, especially if you browse the same sites often