Not entirely correct. Although Proxo is an "upfront" filter, the firewall will still act on internet access.

Not true with Sygate, because of the problem I stated. Proxomitron like other local proxy software sits between the application and the internet. Internet Explorer for example is connecting to proxomitron and not directly to the internet. Sygate is unable to monitor Internet Explorer’s connection to Proxomitron and once you allow proxomitron access in both directions Internet Explorer can send and recieve unmonitored. Sure the traffic is monitored in terms of proxomitron, but sygate has no idea what applications are really passing the traffic especially if you have multiple applications filtered. Its confusing enough trying to track down the embedded applications that use internet explorer’s settings.

In addition, any other software such as adware and spyware blockers, etc. will work as intended. The function of Proxo is to filter out anything you want and can be tailored as needed. It can stop all or little. It can block urls or allow ones you want. The programs do not have free access. They are still monitored and controlled by your firewall. (provided it is reliable and configurable).

Again it has nothing to do with the actual filters or settings in proxomitron. It has to do with the fact that sygate simply does not handle loopback associated with local proxies.

Can't be too well documented...I never heard of it.

Its so well documented on the sygate forums that the moderators were sick of answering questions about it last I checked. As some people are pretty annoying with it, but then again they said it would be fixed in 5.1 and we are past 5.5 and its still an issue.