Cannot disable "Use a proxy server" in IE

I just installed a router in place of MS Proxy 2.0 on a SBS 4.5. I updated DHCP with the correct settings. I uninstalled Microsoft Proxy Client from the workstations and disabled "use a proxy server..." The Internet then proceeds to work flaulessly. Then, when a user restarts their machine the option "use a proxy server..." is checked again and I have to uncheck in order to use the internet. How do I get rid of this! I have IE 5.5 SP1 with no web accelerators or Lotus notes. I went through and uninstalled manually Microsoft Proxy Client to double check through one of Microsofts articles. What else do I do???

Sounds like a policy. Run poledit on the server and take a peek through your options for IE.

I've done a few fixes with spyware in this matter, but I'm not too sure about the MS proxy settings...

Have you 'combed' the registry for the settings?

You can find the Proxy Settings at this key
HKCU\Software\Microsoft\Windows\CurrentVersion\Int ernet Settings\ProxyServer

Good luck.