How to set from my Java application the proxy settings for Selenium?

If you are using the WebDriver API in Selenium 2.0, to control the browser, you may configure the browser to use a proxy, using the org.openqa.selenium.Proxy class to define the proxy, and specify it as a Capability when starting the WebDriver instance. The Selenium FAQ addresses it in a question:

Q: I need to use a proxy. How do I configure that?

A: Proxy configuration is done via the org.openqa.selenium.Proxy class like so:

Proxy proxy = new Proxy();
proxy.setProxyAutoconfigUrl("http://youdomain/config");

// We use firefox as an example here.
DesiredCapabilities capabilities = DesiredCapabilities.firefox();
capabilities.setCapability(CapabilityType.PROXY, proxy);

// You could use any webdriver implementation here
WebDriver driver = new FirefoxDriver(capabilities);

If you are using Selenium RC (of Selenium 1; the API is available in Selenium 2 for backward compatibility), then you will need to configure Selenium Server to use the proxy. This is because Selenium Server is itself configured as the proxy for the browser, and therefore, it is Selenium Server that will have to forward the HTTP requests to the web-application via the proxy. Proxy details can be provided as JVM startup flags to Selenium Server, as noted in the Selenium documentation:

Proxy Configuration

If your AUT is behind an HTTP proxy which requires authentication then you should configure http.proxyHost, http.proxyPort, http.proxyUser and http.proxyPassword using the following command.

$ java -jar selenium-server-standalone-<version-number>.jar -Dhttp.proxyHost=proxy.com -Dhttp.proxyPort=8080 -Dhttp.proxyUser=username -Dhttp.proxyPassword=password