Comment 3 for bug 1037196

I experience a very similar problem.

Funny enough, other proxy variables in the gnome-control-center network applet (https_proxy, ftp_proxy, socks host) are set correctly and reflected as entered in terminal, e.g.

$ env |grep https_proxy
https_proxy=http://<domain>\<user>:<password>@proxy.example.com:8080/

For http_proxy however, it appears that the contents of the HTTP Proxy field is concatenated to some other values (coming from god knows where), which are actually some old authentication data, set prior to upgrading to 12.04:

$ env |grep http_proxy
http_proxy=http://<old_domain>%5C<old_user>:<old_password>@<domain>\<user>:<password>@proxy.example.com:8080/

where '<domain>\<user>:<password>@proxy.example.com:8080/' is what I actually entered in the control center.

I could not find any trace of either old domain, user or password anywhere on the system (searched in gconf-editor and global grep)