This article is from the Secure Sockets Layer Discussion List FAQ, by Shannon Appel SAppel@consensus.com with numerous contributions by others.
A proxy server is a computer program that resides on your firewall
and acts as a conduit between your computer and the broader
Internet. In addition to acting as network guardian and logging
traffic, a proxy server can also provide an enterprise cache for
files as well as replication and site-filtering services.
Any application which needs to communicate through a proxy has to
negotiate with the proxy first before continuing through the
firewall. Netscape Navigator works with many different types of
proxies (such as the CERN proxy server and their own Netscape Proxy
Server) and gateways that use the SOCKS protocol.
One problem with SSL-based traffic is that it does not allow
caching and replication with proxy servers. For a proxy server to
support SSL it must either support SOCKS (a protocol independent
proxy mechanism), or use a special SSL Tunneling protocol. The
Netscape Proxy Server supports both SOCKS and the SSL Tunneling