The problem in question appeared when a laptop with two identically configured WinXP SP2 partitions was connected to a router. Following the same set of instructions from the router manufacturer produced different results for each partition.
To be more specific, both partitions were configured (pre router) to channel all http traffic through port 12080, i.e., through avast! WebScanner. Following the connection to the router, one partition works as before while the other fails to connect to the internet giving the error message
The proxy server is refusing connections. Firefox is configured to use a proxy server that is refusing connections
As a possible remedy, I tried turning off router and modem and then turning them back on. This allowed Firefox to connect initially through the proxy but after turning it (Firefox) off it refuses to connect again. However, FF connects without a problem if I opt for a direct connection to internet rather than the manual proxy configuration in the FF connection settings window.
Needless to say, I would like to continue using filtering http traffic through WebScanner for maximum protection. Any ideas as to how to go about it?