The checkbox to bypass the proxy for local addresses is already checked. Adding 127.* and 127.0.0.1 to its specific list of proxy exclusions did not help.

Our system here is an interesting one: We get our DNS information from a completely different place than we get our actual web traffic from. Sounds like it would be a problem when I say it, but it's always worked great.

Here's how it works: We connect to our local LAN as well as communicating to our corporate headquarers via a frame relay connection. The corporate servers dole out our DHCP addresses and DNS/WINS queries across this frame relay link. That allows us to all work on the same network. Everyone here simply sets their system to "automatic" (the default Windows settings) and the Cisco router between us and HQ properly forwards all DHCP and name server requests and replies.

For our web traffic, we have a local DSL line running off of a proxy server at a fixed IP address. We manually configure our web browser to point to the address of this local proxy. But this proxy does not handle our name requests, it just handles all the actual web data transfers. Clear as mud?

I can't tell this DSL proxy to do my name requests, or else I wouldn't be able to communicate on our local LAN, or be able to connect the servers at HQ.

Anyway, do you think this sytem might explain it?