I just installed the latest Squid 3.0. It runs as proxy:proxy by default. The documentation of VideoCache mentions squid user as the owner of VideoCache directories.
Should the owner be squid:squid as in documentation or proxy:proxy as the uid of Squid process?
It should be proxy:proxy just as Squid is. If you're just installing videocache then modify lines 33 and 35 of setup.py to reflect proxy:proxy before running the installation script.