Configuring Windows 7 Update to Use a Proxy Server

Occasionally, on networks that have specific firewall and proxy configurations, Windows Update clients are unable to contact the Microsoft Update servers on the Internet. There are several ways to deal with this problem. The first is to deploy a WSUS server on the local area network (LAN) and have the clients download updates from the WSUS server. When setting up the WSUS server, you can configure it to use the proxy. Alternatively, it is possible to configure a client running Windows 7 manually so that Windows Update can communicate with the Microsoft Update servers through the proxy. Although you can configure Internet Explorer to use a proxy through Internet Options, Windows Update cannot use these settings directly. You can configure clients running Windows 7 to determine proxy settings in two ways:

• Use Web Proxy Auto Detect (WPAD) This feature allows computer services to locate an available proxy by querying a Dynamic Host Configuration Protocol (DHCP) option or checking a Domain Name System (DNS) record.
• Use the Netsh.exe command-line tool Although Windows Update does not use the Internet Options settings directly, you can use the Netsh.exe command-line tool to import the proxy settings configured for Internet Explorer. To accomplish this goal, use the following command from an elevated command prompt:
  netsh winhttp import proxy source=ie

More Info Web Proxy Au to Detect
For more information on configuring Web Proxy Auto Detect on DNS and DHCP servers, consult the following document on Microsoft TechNet: http://technet.microsoft.com/en-us/library/cc713344.aspx.