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Click on the location in the bottom right hand corner of the window - typically Office (Network) and then click on Edit Locations. This brings up the preferences dialog open at the list of locations. Select the one you want and click Edit. ON the basics tab there is an entry for proxy configuration in which you should see your proxy entries. Click the Viking hat with a propeller on top (I've never worked that icon out) and a properties dialog opens. You can enter Exceptions in the box so named. Put localhost in here.
The problem seems to have gone away in 8.0.2
Feedback response number WEBB7K6MEZ created by ~Carol Chuvelutex on 10/06/2008