If I configure internet explorer to use a proxy server,
Will the websites I surf be hidden from the system administrator of my lan?
Will my IP be hidden from the website administrators of the browsing website?
It depends on several factors:
Your sys admin might not see the IP of the specific website, but they will see the IP of the proxy. If they feel motivated, they can look that up and see you are using a proxy. Which, if the desire is to keep your online activities hidden, will still land you in a possible meeting w/ the admin about why you are using a proxy to browse the internet.