There seems to be an issue with proxy config information not getting migrated properly from rhn_register. Symptons seem to be that up2date ends up with up2dateProxyAuth enabled, but no ProxyUser or ProxyPasswd set, eventually causing a traceback. 1) the code that uses these values should verify sanity 2) not sure yet how these bogus values got set, but the code that migrates the proxy settings from rhn_register look most suspicious.
no longer applicable with current code base.