Put it in exactly like that, so it reads "169.254.140.1:808" in the Linksboks file.
Ok, put it in exactly like that within Linksboks. I disabled my firewall at the moment for testing. Now when I try to access www.google.com from xbox/Linksboks, I get error message " ERROR LOADING PAGE
http://www.google.com" and "ERROR READING FROM SOCKET". Looks like the host not found message I was getting before, just different message, but same graphics.
I also tried that last step your suggested (config proxy in IE). Once I do this, what am I suppose to do to see it helps. I tried connecting to the web through linksboks afterwards, with no luck. The reason I ask is because in your post you say "just to check that the proxy server works". Not sure if there is a step there I haven't taken to see if it works.
I apologize for being so stupid, and I'm not going to make up any excuses like, " I'm half asleep". When it comes to this I'm stupid. Also thanks YSBOX for your time and help. I appreciate it.