Why does my browser not use my AD login name / credentials when I browse the web using Vista with HTTP Proxy and Windows (AD) Authentication enabled?

The HTTP Proxy (squid) is using negotiated NTLMv2, which Vista does not allow by default (only straight NTLMv2).  The following changes  to your Vista configuration are required:

• Start -> gpedit.msc (run as administrator)
• GoTo: Computer configuration > Policies > Windows Settings > Security Settings > Local Policies > Security Options
• Find  "Network Security: LAN MANAGER Authentication Level"
• Set it  to "Send LM * NTLM - use NTLMv2 session security if negotiated"

After applying these changes your browser should automatically use your AD Login Name / Credentials for HTTP Proxy authentication.