Windows Update is a tricky thing.

It can use a proxy server (see
one of my previous posts on this), but it won't use the same proxy as you've set in "Control Panel" / "Internet Options" (aka. IE's proxy settings). Windows XP has a "hidden" HTTP service (it's actually a driver visible in "Device Manager" under "Non-Plug and Play Drivers") and Windows Update uses this service to access Microsoft's servers. To set a proxy for this service, you've to use the
proxycfg command line program. However setting a SOCKS proxy won't take any effect (at least it did not for me, neither for airwin). But there're ways to get around this.
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