I wrote a blog post on WPAD some time back to be specific this one http://blogs.technet.com/b/sooraj-sec/archive/2011/07/07/wpad-is-working-or-not.aspx and I got case on a subject related to this ,I thought the post and the details in it ,will be good...

Once again this one is from one of the cases that got escalated to me and it was a very interesting case. I m putting my probing questions that will explain how we narrow down the issue as issue was little misunderstood in the beginning and troubleshooting...