Yup. It does work, but it's a bit pokey -- mostly because the browser has to multitask with the proxy. However, it works on my IIci with 7.1 and IE 2.1.
Netscape doesn't like it, however -- it complains about socket errors. This seems to be the same infamous -3155 error that even afflicts Classilla and WaMCom which I'm finally going to fix in the next version, now that I have a trace of it.
Anyway, I'll let people toy with it when I'm done. All it needs is the MacPerl executable, no library. It will even work with MacPerl 4.1.8. Amusingly, I bet A/UX would be an even better host since the proxy could run preemptively separate of IE.