There are options for proxy settings in c:\program files\k-meleon\prefs\all.js but they definitely do not work. Since I use my proxy to filter out all my adverts I find it painful to browse without it. All it needs is SSL and proxy support and I'll be happy.
So far this looks like a great application, though. Kudos to the programmers for writing such tight code. This may end up being what replaces my PC-Lynx install. Keep up the great work!
You can copy your netscape proxy preferences directly to k-meleon, or so the rumor says.... I stopped running squid a few months ago when I encountered some problems I didnt have time to fix, so I can't test very well