Unless the traffic between your PC and the proxy is encrypted somehow, your ISP knows (or at least can know) exactly what you're doing. The proxy only masks you from outside viewers.
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i see... since the last time was a certain motion picture company that filed a report on the last torrent (or however that works), and my isp was forced to take action. so i really dont know if i should blame my isp, or whatever... i dont really know where i was going with that