1. The HTTP request is sent from the client to port 8080 of the proxy server. The proxy server then makes a new HTTP request to the target site. Depending on the configuration, the proxy usually adds an "X-Forwarded-for" header to HTTP requests. The log file on the destination site will show the proxy's IP address, but it may or may not be configured to record the "X-Forwarded-for" address.
This is a typical configuration, but the proxy software will allow you to do a variety of customizations.
2. The HTTP specification allows request lines to exclude server names and ports that are not used by the proxy (because these would not be necessary if requests were sent directly to that server). However, according to the specification, the absolute URI form is required when a request is sent to a proxy.
But to use the proxy, the line must contain the server name (or port if not 80).
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