Have a look at smoothwall.org
I have this running on an old pc with large memory and harddrive. This serves over 150 networked PCs and allows me to block sites, and content and all for free.
This has been running undisturbed for over a year.
We use a SonicWall appliance to do content filtering and it has an AV function as well. (We use Symantec for our AV) This can be pricey but it works well for us.
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