I wanted to post this as an FYI.
I ran into this issue today on a Windows 7 workstation running Internet Explorer 8. The proxy setting correctly pushed out through the Group Policy to the workstations and about 95% of the workstation worked without issue. However, I've got a handful of workstation that got Authentication Failed when launching Internet Explorer. I look at everything I could think of on the Astaro logs, but didn't find anything to lead me to believe that the configuration was incorrect. After troubleshooting and upgrading to the Internet Explorer 9 I was just about at my wits end. When I decided to test removing the Enable Integrated Windows Authentication. As soon as I did this the Browser was able to Authenticate the user against the Astaro and get them Internet Access.
This check box is located in Internet Options - Advanced - Scroll to the bottom and go up from there. You see Enable Integrated Windows Authentication* - Simply uncheck this and restart Internet Explorer.
Hope this helps in case anyone else runs into this issue.
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