Anonymous Proxy Web Surfing

[Jason Jaszewski <jmjaszew () facstaff wisc edu>]

Say I want to surf the web using anonymous proxy servers around the web. I
have encountered several Windows apps that will bounce traffic to different
proxy servers around the Internet. I understand how this works, however, I
am wondering about the security of it. Say a user wants to authenticate with
web mail, such as hotmail. When he or she authenticates with hotmail, that
traffic would also pass through the anonymous proxy servers. I assume this
can/does lead to someone getting password and username information from the
data that goes through the proxy server, in a way using a proxy server to
collect this sort of information from consumers who don't know any better,
but were informed by someone that this "anonymizes" Internet surfing. Just
how good are these anonymous web surfing applications/services in this
respect? I am asking from the standpoint of using this to add another level
of security to an otherwise tight system.

Thanks,
Jason