This *IS* already long, and winding, and partially boring.

Let me nevertheless update the discussion to Lucid:
No, "System-Wide" at Network Proxy Preferences does not set any proxy at all; 
at least I can't find any being used. It should apply to apt-get, as well as 
the Terminal Session (Gnome Terminal). It isn't. This is 10.04, netbook remix.

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Does not use system proxy settings
https://bugs.launchpad.net/bugs/304889
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