[squid-users] Transparent Proxy & No Caching

I know this has gone through many times. I seem to read something about
it and then when I need to know it for myself I can never find it in the
archives.

My problem is below...

I have a transparent proxy set up and working fine. Outgoing requests on
port 80 are grabbed by the router and redirected to 3128 on proxy box.

acl's are fine, everything is working as expected except that the pages
are not being cached. All requests when going through the proxy
transparently are showing as TCP_MISS and store.log has RELEASE entries
as soon as the file is finished downloading.

Requests going through the proxy when the client is configured are fine.
These are being cached and handed out.

Files which are cached through a "configured client" are not being given
to a transparent client though. When the trans client requests it,
access.log gives a TCP_MISS and fetches it again, then releases.

squid.conf has the following directives included...

--
httpd_accel_host virtual
httpd_accel_port 80
httpd_accel_with_proxy on
httpd_accel_uses_host_header on
--
I have tried without them but it doesn't work (web requests hang giving 
the impression of no connectivity).
I have tried removing httpd_accel_host and httpd_accel_port with no 
success (proxying but not caching).
The squid.conf comments seem a bit vague to me..
#  TAG: httpd_accel_with_proxy	on|off
#	If you want to use Squid as both a local httpd accelerator
#	and as a proxy, change this to 'on'. Note however your
#	proxy users may have trouble to reach the accelerated domains
#	unless their browsers are configured not to use this proxy for
#	those domains (for example via the no_proxy browser
#	configuration setting)
#
#Default:
# httpd_accel_with_proxy off
This tells me that *normally* transparent requests aren't cached, but if 
you set it to on they will be.
I really am going nuts over this, and just need another person to be 
able to clarify what is going on for me and point me in the right direction.
Sorry for so much to read :)