May be a stupid question but Safari doesn't seem to want to take the proxy settings from the user that has logged in.

Windows user logs in to mac > opens Safari > prompted for credentials

Where would I set the Mac to carry across the user information so they don't have to try it all in?

Background information:
OSX 10.8
OSX Server 10.8
AD 2008 r2
Windows Server 2008 r2

Many thanks in advance