Socks is a protocol that was originally designed to allow firewall traversal through an RPC-like wrapping of socket calls (so you replaced connect() with something like Rconnect() and it really executed on the firewall via a TCP socks-protocol RPC channel). It grew to have transparent proxying abilities thanks to shared library tricks and some server (bind()) and UDP support.
Socks predates PAT, and PAT is frequently a better solution now because it requires no host changes while socks requires software support on the client. Socks is still a handy tool to have around for when you want to run various things through a proxy or as part of your firewall bag of tricks (some sites actually like that it requires special client support, it helps lock down what programs / apps can traverse the firewall).
Dante is a freely available *IX socks4/socks5/msproxy server that's easy to install and works well.
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