Android OS has never allowed its users to configure global (or even browser) wi-fi proxy settings (which has been a base feature of Win Mobile, Apple, and even Symbian devices since long before the concept of Android was even released to the public). It has been an issue since the birth of Android and it was officially reported to Google developers (who must all have generous data plans) at code.google.com back on Nov 12 2009 (http://code.google.com/p/android/issues/detail?id=1273).
The vast majority of education institutions (and a huge percentage of corporate environments) worldwide have some kind of proxy to get through in order to access the web. The ipad is proving to be a huge hit (as anyone might expect) and a fair amount of interest is being shown by education institutions globally where many are working towards the dream of replacing reference books and even work books with ipads especially at the secondary education level. So as it currently stands, Android tablet devices cannot even be considered as an alternative at these places due to this issue. Google really needs to pull their finger out and address this enormous flaw before Android can expect to be noted as a serious competitor.
However, in spite of the fact that Google have had over 6 months to address it and have more than 1000 very frustrated people jumping up and down (and that's just in the thread mentioned above alone), Google has seen fit to classify the issue as merely an "enhancement" of "medium" priority. Apparently no steps have been taken towards doing something about it in 2.1 Eclair or even 2.2 Froyo and we see cosmetic features like animated "live" wallpaper that apparently take priority over the basic functionality of enabling students and business people to connect to the outside world. Google has not as yet released any form of statement to its frustrated users to explain their reasons for neglecting the issue, or their plans (or lack thereof) to remedy the situation.
Many Android fans and network administrators that I know are in a position where they would like to recommend Android devices to colleagues, clients and friends but find that they are unable to due exclusively to the lack of proxy support for wi-fi connections. Furthermore, it is not a widely known flaw to potential buyers. Being such a standard feature to expect on any new device, many people have been stung by the realization of the fact after they have purchased an android device in good faith that no company in its right mind would allow an OS to be so far past intial beta stages and still not incorporate such a base line feature. This is leaving a bitter taste in a lot of people’s mouths and they are converting back to windows or apple powered devices with a reluctance to place their trust in Android so readily in the future. Google need to wake up and give the consumer real freedom of choice and a competitive product which isn't biased away from those people, places, and devices which are unable to rely on a sturdy mobile broadband connection or else consumer loyalties will be embedded elsewhere.
(A network administrator in Australias public education sector)."