sparrow@vb:~/.cabal$ cabal update -v3
Downloading the latest package list from hackage.haskell.org
Sending:
GET http://hackage.haskell.org/packages/archive/00-index.tar.gz HTTP/1.1
User-Agent: cabal-install/0.10.2
Host: hackage.haskell.org
proxy uri host: local_proxy, port: :proxy_port
Creating new connection to local_proxy:proxy_port
Received:
HTTP/1.0 200 OK
Date: Tue, 02 Aug 2011 08:51:16 GMT
Server: Apache/2.2.9 (Debian) mod_python/3.3.1 Python/2.5.2
Last-Modified: Tue, 02 Aug 2011 04:38:12 GMT
ETag: "1bda0be-2de1d4-4a97e50b73500"
Accept-Ranges: bytes
Content-Length: 3006932
Content-Type: application/x-tar
Content-Encoding: x-gzip
X-Cache: MISS from local_proxy
X-Cache-Lookup: MISS from local_proxy:proxy_port
Via: 1.0 local_proxy (squid/3.0.STABLE2)
Proxy-Connection: close
Downloaded to
/home/sparrow/.cabal/packages/hackage.haskell.org/00-index.tar.gz
cabal: /home/sparrow/.cabal/packages/hackage.haskell.org/: permission denied
sparrow@vb:~/.cabal$ 
=================================================================

When i try to use "sudo cabal update":
=================================================================
sparrow@vb:~/.cabal$ sudo cabal update -v3
Downloading the latest package list from hackage.haskell.org
Sending:
GET /packages/archive/00-index.tar.gz HTTP/1.1
Host: hackage.haskell.org
User-Agent: cabal-install/0.10.2
Creating new connection to hackage.haskell.org
cabal: timeout
sparrow@vb:~/.cabal$ 
=================================================================

http_proxy and cabal version:
=================================================================
sparrow@vb:~/.cabal$ set | grep HTTP
HTTP_PROXY=http://local_proxy:proxy_port/
sparrow@vb:~/.cabal$ cabal --v
cabal-install version 0.10.2
using version 1.10.2.0 of the Cabal library 
sparrow@vb:~/.cabal$