Java Update doesnot popup authentication dialog for authenticated proxy settings

Problem Description : When Authentication Proxy server is specified in the
                      IE proxy server settings , Java Update doesn't popup
                      authentication dialog.
                      
                    Java Update makes connections to the server continuously
                    for authentication proxy server setup.

Tested_Java_Release : PIT Build 09 for 1.4.2 (mantis)
Tested_Java_Release : Mantis beta
Tested_Build : J2RE.exe
Tested_Build_Location : /net/sqesvr/deployment3/mantis/JI-PIT-09/windows-i586
Test_Location : Java Update Tests ( see steps to reproduce)
Tested_Machine_Name : sqe-jpi-04, jdsqe-lab2
Testted O/S : Windows XP, Windows 2000, WIndows 98
Tested_ Browsers : IE
               
 Steps to Reproduce :
 --------------------

 1.) Install the mantis j2re.exe from the above mentioned location
 2.) IE proxy settings specify the authetication proxy server
                  Eg: kittest.sfbay.sun.com Port: 1025
 3) login to the proxy server and open the access log to see the connections.
 4) On Test Machine ,Java Control Panel -> update tab -> click on "Update Now"
     button.
 5) access logs shows there continuous connections from the test machine
     and no authentication dialogs popup on the test machine for authentication