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Originally Posted by Paul M
Because, as smharman says, 127.0.0.1 is your local loopback address, it never leaves your pc.
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Sorry to labour this, but I'm genuinely intrigued. I thought the domain name, if in the hosts file, was resolved to an IP address BEFORE any DNS look-up, so the request leaving the PC would be for the OP's new IP. I'm obviously missing something, but I don't understand where NTL's proxies come into it.