I was having trouble getting update-manager to work behind a proxy (without authentication). I tried everything I could find in my search, including setting http_proxy environment variable, setting the System->Preferences->Network Proxy and setting the Synaptic package manager proxy settings. Nothing seemed to work.
It turns out that the problem was that the System->Preferences->Network Proxy allows "automatic" proxy (pac file), and I had used that. update-manager doesn't do anything with this setting I guess. I changed from the automatic setting to a host/port manual setting and it began working.
I suspect this qualifies as a bug. update-manager should do something more reasonable than quietly fail if the settings are for automatic - it would be really nice if it worked, and if not then an error message.
Hope this helps someone else