The quote "Transparent proxying (more commonly known as TCP hijacking) is like Network Address Translation (NAT) in some respects: It is to be avoided at all costs, and only used if there absolutely, positively, no other way." is old and probably the most inaccurate statement I've ever seen on an O'Reilly site.

Transparent proxying is not referred to as TCP hijacking. (The term is used to describe Man-in-the-middle attacks which may or may not have anything to do with any form of web usage.) NAT isn't to be avoided at all costs. (Almost every home network does it, for a start.) Transparent proxying is used regularly by ISPs (esp. those with expensive overseas peering costs) with almost no downside and the suggestion that it should be avoided because some applications are badly written and don't conform to standards is ignorant tripe.