Josh Cohen from Microsoft gave a brief overview of the current WPAD
implentation in IE5 at last week's IETF WREC meeting.
A couple of additions to what has already been stated here:
1. WPAD can work by either DHCP or DNS. It is, I think I remember, off by
default for modem connected Windows machines and on by default for
DHCP-configured machines.
2. The currently posted draft describing WPAD is out of date though a new
one will be submitted soon.
3. I believe the wpad.dat format allows you to select from multiple PAC
files. (I have no details)
Regards,
John