Using Squid in Windows XP Getting Error can't open website

I have installed Squid squid-2.7.STABLE8-bin in Windows XP in Vmware Workstation .. i have installed it in C Drive And followed the steps mentioned below now squid is running .. the changes i have made to my squid file is

Step i followed

My Squid.conf File Configuration is here

Im reciving this Error now While opening Websites

The following error was encountered:

�Access Denied.
Access control configuration prevents your request from being allowed at this time. Please contact your service provider if you feel this is incorrect.

Your cache administrator is webmaster.

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Generated Sun, 23 Dec 2012 11:58:13 GMT by smile-f3de59b41 (squid/2.7.STABLE8)

Please Help me to fix the issue ,

Now i have installed and checked in Vmware .. But i have to do it in a Network consists of 6 Systems

And i want to restrict a Particular users to for downloading EXE, AVI , MP3 , and torrents how can i do it pls help ASAP ...

Thanks in Advance .....