Using TOR and other proxy servers
This is for people with broadband connections (cable, ADSL)
This is my little tutorial/guide on how to use TOR for windows XP. I did this actually because its raining outside and IM bored. Lets begin.
This is for Windows XP with IE6 or IE7 firefox same setup (basically)
Go to http://tor.eff.org/download.html.en and download the bundle which consists of Tor & Privoxy & Vidalia bundle: 0.1.1.26 (sig), 0.1.2.12-rc (sig).
Download it, and save it on your system. Next, run it and install it on your system. After you click 'finish' the white privoxy window will display. Keep this window open just minimize it.
Next, is Vidalia (GUI for TOR) the icon, in the system tray which is a little grey icon for TOR, before starting Vidalia lets configure our web browser. If your running IE6 OR IE7 use this configuration setup. For additional security, I would recommend disabling cookies in your web browser before configuring TOR to work with your web browser.
Open IE go to tools, internet options, click on connections tab, click on LAN settings below, place a check in 'Use a proxy Server,' leave those two white fields blank. Next, click on the advanced button:
Under 'Proxy address to use'
Under HTTP: enter localhost port 8118
Under SECURE: localhost port 8118
under FTP: localhost port 8118
Under Gopher: leave the field blank.
under SOCKS: localhost port 9050
Do not check "use the same proxy server for all protocols" also leave the bottom box blank. Click on OK. and OK and OK. This will close it.
Now go to start, all programs, click on TOR, this will bring up a command prompt box: saying something similiar;
Minimize this box or close it.
Apr 15 10:58:00.665 [notice] Tor v0.1.1.26. This is experimental software. Do no
t rely on it for strong anonymity.
Apr 15 10:58:00.735 [notice] Initialized libevent version 1.1b using method win3
Apr 15 10:58:00.735 [notice] connection_create_listener(): Opening Socks listene
r on 127.0.0.1:9050
Apr 15 10:58:17.930 [notice] We now have enough directory information to build c
Apr 15 10:58:22.517 [notice] Tor has successfully opened a circuit. Looks like c
lient functionality is working.
Next, right click on the grey icon (tor) and go to start. It should now have a green onion instead of the grey icon. To see if TOR is successfully installed go to www.ipchicken.com or www.ip2location.com and see what it IP address it detects. Or you can open command prompt an issue netstat -ano and look for the established connections. Or you can open comand prompt and issue netsh diag connect ieproxy
Just a little FYI, Tor uses SSL to encrypt all data, and doesn't even leak DNS requests, unlike some proxy servers. As long as it's configured properly and using an appropriate proxy (such as Privoxy, which comes in the bundle).
C:\Documents and Settings\sysadmin>netsh diag connect ieproxy
Internet Explorer Web Proxy (localhost)
IEProxyPort = 8118
IEProxy = localhost
Server appears to be running on port(s) 
C:\Documents and Settings\sysadmin>
TOR cannot offer 100% total anonmity so If the connection to the website is not secure (e.g https) then the last gateway will be able to see (and potentially sniff) all traffic.
Thus, it is vitally important when using TOR to check the server certificates and only use encrypted protocols (pop3-ssl, https) if you are logging in.
However, it is true that communication between nodes is encrypted so an intermediate node cannot intercept it.
Another way to use a proxy server to assist in your web surfing a website proxy server such as www.hidemyass.com where you enter the website you want to visit in the field provided. It will connect to them with their information instead of yours. Again, disabling cookies in your web browser first before configuring TOR to work with your web browser.
Another method is to use a public proxy server from sites such as http://www.publicproxyservers.com/page1.html
I perfer to use a proxy server from this site but in another country, and perferrably a so called* high anonymity* proxy server running on port 8080.
To do this Open IE go to tools, internet options, click on connections tab, click on LAN settings below, place a check in 'Use a proxy Server,' this time fill in the two white fields with any of the proxy servers from this site or any proxy site. Hit OK and OK. Go to www.ipchicken.com and see what IP address it detects.
A little more FYI I have the best luck from this site http://www.publicproxyservers.com/page1.html
when I select proxy servers running on port 8080.
Only downfall they leak DNS request so your not as anoymous as you think you are.
I hope this helps. Cheers, :)