Kyanar: The connection between you and the proxy is still unencrypted and can be intercepted and analysed by Layer 7 DPI equipment - again, if your ISP feels so inclined which it is very unlikely they do.
No its not.
But it depends on your setup.
For secure browsing I use an ssh tunnel with port forwarding. (putty) All my traffic including DNS requests is sent over the encrypted tunnel.
