I run different settings on different proxies, depending on what I'll let the users do with it.
connection timeout: 6-7 (I believe its set at 5, but I give 1-2 sec more)
transfer timeout: 300 (see below: "download speed limit")
filesize limit: 2-5 (I run at 5, but 2 is ok. Not a real reason behind the 5, I think I tried it and just never changed back to 2)
Download speed limit: 0 (if you change this, you'll need to change the transfer timeout. I leave it at "0" and allow 60 sec per meg of download - 60 sec x 5 megs = 300 sec.)
Resume transfer: No (if your not allowing downloads from file storage sites, I'd leave it No)
Queue Transfers: No (one download at a time is enough)
The above settings should work out pretty well for you.
I have a glype tutorial at my site (Setting Up A Glype Proxy (Detailed)- anonymousplanet.com) that layouts how to get a glype proxy up and running. I'm working on one now that will cover the best settings and etc...