First lemme start by saying i only know about my ISP that I work for. And we have no proxy that our dial up users go through to meet the outside world. Im sure they thought about it, but lets think about it here. We have 400,000 dial up customers. They get virus', and infected with spam bots. Now.. if one of them were spamming through our Proxy, then our proxy with 400,000 users would get blocked as opposed to the single customer.

However ISP's that DO offer such a proxy, keep a RADIUS log(This matches your IP with a username). If an abuse report comes from The Secret Service(Which they do daily), then and only then will they release that information. Other wise they would just suspend your account for mis-use.

Another thing...there really is no privacy on the net from your ISP. I could take a Packet capture on a dial up IP and if he was chatting on AIM or IRC or Yahoo, i could straight up read the messages. Point of the story, you have no privacy from your ISP. Just behave, and they wont have a reason.