in and out tells the router where to intercept the HTTP request from the client.
So, you can intercept on inbound - incoming interface - interface where traffic enters the router. This is the "IN" keyword.
You can also intercept it on outbound - outgoing interface - interface where traffic is normally forwarded by the router. This is the "OUT" keyword.
In your case you want the 'in' on interface fa0/0.
One reason to go for 'in' is much better performance than out.
[but you could do out on the serial interface going to your isp]
If the cache is on the same interface as the clients, you need the command 'ip route-cache same-interface' on interface fa0/0 to permit traffic to be redirected to the cache correctly.
Regards,
Gilles.