Yes, this is a proxy that requires authentication.
The results of $http_proxy does not include the authentication
credentials if it is set "system wide" on Karmic Alpha 5:

http_proxy=http://proxy.domain.com:8080/

For $http_proxy to work, I use the following:

http_proxy=http://username:[email protected]:8080/

-- 
Synaptic, update-manager, apt-get and wget  should share proxy settings
https://bugs.launchpad.net/bugs/283500
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