Most hackers just write a little script in command prompt that will send hundreds of ping commands per computer. then send it as a virus to thousands of computers. then at a specific time they all send the ping commands at once. which the web server has to reply to each ping(unless they have it turned off)(try pinging microsoft.com).
that is the easiest way to do it.

More than likely the college "servers" had a VNC connection open, or something as equally retarded, like someone posted above, 90% of hacking is taking advantage of retarded system configs, or exploits due to non-updated systems. To the OP: I'm going to caution you. This kind of knowledge can tempt you, whether you think it will or not. I will go over a few things I know, and by no means am I an expert hacker, more like a kid who got caught in a bad situation, and was forced to learn.
About my post: I am not going to give any links or any tools to "hack" other people. I will give a general overview of what is common and possible, but in no way am I going to give other people tools that can be used improperly to harm others.

Most people do not count DoSing (Denial of Service) as hacking, but I sure as hell do. Among the internet junkies, this is a fairly formidable approach to ultimately overwhelming and crashing a server/computer. A DoS attack is one in which too much information, ALOT, is sent far too quickly, which then blocks the target from processing other incoming connections. It pretty much just jams the desired target, and will keep remaining jammed, or slow if it's an unskilled and uncoordinated attack. This kind of attack can be devestating say if you run a business over the internet, e-commerce, and you are suddenly targeted.

Ports: While alot of people use exploits other people can "inject" there own backdoor torjans and other malicious code, via open ports on a system. The most common port open is 80, seeing as it is the port your computer uses for your browser to view webpages. There are a vast number of ports on your computer ranging from 1-30,000. I'm sure it's higher than that, but I don't feel like looking up the general number at the moment. Every program or game you run that connects to the internet, uses a different port, so you can imagine how quickly this could become a problem.

Alot of the time hacking results in a person's ignorance. I'm sure many people, even on this very forum, use one or two passwords for most of their online login's. That is a very big no-no. A skilled person can crack even the most complex hash, and even the forum "standard" which at the moment I believe is md5. Alot of times a forum will "salt" a hash, adding extra characters to the string, which makes it nearly impossible to crack. If I were to crack a database, steall all the hash's for the passwords, I could create a large ammount of headache, for a large ammount of people. This is even more dangerous if you use that password for an online banking site, or an account that has access to your paypal, googlecheckout, or credit card.

These are the most common things I have been forced to deal with, and I believe some of the more common things found on the internet. Most of the time though, someone who "hacks" doesn't really understand what they are doing. There are very few real hackers left in the world, and those who aren't employed by government agencies, are even smaller. Alot of the time when a site get's hacked, or something along those lines, they go to certain sites, ones I will not name here, and find general exploits for various operating systems, and various forums. I would have to say if you do indeed use SMF forum boards, you immediatley apply every patch that is released for it. SMF is easily one of the most hacked boards out there. Also, if you own Windows Server 2003, or windows 2000, make sure you have ALL the new patches, those two are the most commonly targeted operating systems. Windows 2003 is the OS that most datacenters use, other than linux.
If you have more questions, feel free to ask.

Also, as to proxies, the only thing they usually are used for is to change your IP. A VNC connection could use your computer as a Proxy, and do bad things from.