When using this tool, you can get error when connecting to a Crm deployment or organization specifying a proxy authentication error.
You need to specify custom proxy settings. Click on the proxy button on the main toolbar
This will open the proxy settings dialog
To use custom proxy, tick the check box
Specify :
When validating this dialog, the proxy settings are saved in the configuration file Mscrmtools2011.config (The same file used to store the connections).
NB: the password is encrypted before being saved to the file