A Transparent Cache intercepts all web traffic (all port 80 for instance) to a particular IP address. It doesn't let your request make it to the real web server... instead it serves back content as if you were accessing the web server directly. It looks (and acts) just as if you were on the real web server... but all your requests are in reality being served from the Transparent Cache.
There are lots of reference to this in Google (as you probably know). Hopefully someone here will have a more complete definition for you!
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