Instead of changing the Rom to set proxy as I mentioned in the first post here is the application to make the proxy work in your Android phones.Still you have to root the phone.Rooting can be done using a single click as described in the tutorial in my previous post.
Here is the link to the application.
I have tested this applications with various ROMS,various Android phones and it works very well with proxy as long as it is a http/http(s) proxy...I can browse webpages,use google maps,look at Android Market using the Appbrain application.Make sure to run this application and key in these details :
Proxy Port:- (already set to 8080 by default)
Enjoy using the Android Proxy Settings Application...Make sure to share your comments...I will be posting further updates on this in the blog.So stay tuned!!