On the proxy configuration page settings cannot be saved, or when you try and update the credentials you receive an error message stating 'Proxy authentication failed. Please confirm proxy settings are valid'.
Customer had moved their local copy of solutionsam (http://www.Solutionsam.com/Solutions/6_0/) from E:\Solutionsam\6_0\ to E:\SolutionSam\6_0\20080930\ however never updated the Solution Center settings. It appears that when you go to configure or update the proxy settings the solutioncenter.xml file is read from the location that the Solution Center points at.
In this case the path to the solution center location was updated to the new location of the directory on the file system.
Solution Center settings configured to use other location which pointed to E:\SolutionSam\6_0\.