what is a shell?
A Shell is a UNIX term for the interactive user interface with an operating system. The shell is the layer of programming that understands and executes the commands a user enters. In some systems, the shell is called a command interpreter. A shell usually implies an interface with a command syntax (think of the DOS operating system and its "C:\>" prompts and user commands such as "dir" and "edit").

A shell account simply gives you remote access to a shell on server ( usually un*x ), allowing you to execute the commands that you have permissions to execute.
You can always use a shell account to perform anything from simple commands ( telnet and ping ) to create a secure connection between your host and the shell, then generate a connection from the shell to the desired destination.

Check this LINK for a list of Free shell account Providers

Back to our subject :)
A shell account can be used to hide your identity, but its way too difficult to be used by a newbie ( you wouldn't be reading this section if you weren't one :) ), thus Hiding the IP using a Proxy server is recommended.
Any how,
-If you want to hide your IP when you establish a telnet connection to a remote host, you can simply connect to a shell account and establish the telnet connection from there by simply typing ( telnet ) at the command prompt.
-If you want to hide your IP when you establish an Ftp connection to a remote host, you can also connect to a shell account and establish the Ftp connection from there by simply typing ( ftp ) at the command prompt.
If you want to hide your IP with any other kind of internet communication you need SSH.

ssh -R <local port>:<Proxy Server>:<Proxy Port> <shell address>
Example:
Supposing that you want to use a shell provider called nether.net
and supposedly you destination server is ( host.domain.com ) on port 21
now you have to choose a port which is open. I.e. 12000

you type
ssh -R 12000:host.domain.com:21 nether.net
you will be asked for your nether.net password
you type your login password.
that's it
now all you have to do is to connect to nether.net on port 12000, and it will be as if you are connected to host.domain.com on port 21 !
Explanation: Nether.net establishes a secure connection to your machine through port 12000, and a remote connection to host.domain.com on port 21.

this technique can be used to bypass ISP`s Proxy restriction and port blocking
( explained in their appropriate sections )

But hey!!. what if SSH wasn't installed on the shell ??
Don't worry. here comes a step by step guide :)

Installing SSH:

• log in to the shell account.

• Download the SSH Client. either by FTP, by mail , or any other way that works, I would suggest that you use LYNX ( text based web browser )

  • Download SSH from THIS LINK

• Unpack the file By doing the following:
  gzip -dc ssh-x.x.x.tar.gz | tar -xvf -
  If you get an error message saying that the file doesn't appear to be a Gzip file, then you might want to try to use the following command tar -xvf ssh-x.x.x.tar.gz
  This should unpack the file in a folder called ssh-x.x.x

• Switch to that folder by typing
  cd ssh-x.x.x           Notice that this file name is for illustration purposes only!.

• now type 
  ./configure             Dont Forget the period and the slash
  this should show up a lot of details on the screen, the operation should be automated, and you don't have to do anything except to wait.

• when this finishes and you get the prompt again, type 
  make
  this should also take a while.

• Then finally, type 
  make install
  this should take the process to the final step, and SSH will be ready for use.