How do I configure the proxy settings so eclipse indigo can install new plugins
!MESSAGE System property http.proxyHost has been set to 8080 by an external resource. This value will be overwritten using the values from preferences.

You need to specify the following options below the -vmargs option in the .ini file, each on a separate line:
-Dhttp.proxyPort=8080
-Dhttp.proxyHost=myproxy
-Dhttp.proxyUser=mydomainmyusername
-Dhttp.proxyPassword=mypassword
-Dhttp.nonProxyHosts=localhost|127.0.0.1

Btw, are you behind an HTTP proxy or some other proxy? and why doesnt preferences menu work for you?

Try adding this line to .ini file if above arguments dont work:

-Dorg.eclipse.ecf.provider.filetransfer.excludeContributors=org.eclipse.ecf.provider.filetransfer.httpclient