SQL Server Proxy Account

George,
Who require proxy access ?
This will allow jobs scheduled by non-admin users (such as Bank staff) to properly execute DTS packages.
SQL Server Agent proxy accounts allow SQL Server users who do not belong to the sysadmin fixed server role to execute xp_cmdshell and own SQL Server Agent jobs. The administrators can assign appropriate security permissions to the proxy account to control the ability of these jobs to access resources in the network.

Why they needed?
1. SQL Proxy accounts are required to enable general users to schedule and execute SQL jobs for DTS packages (ETL).
2. In SQL Server 2000, a domain user cannot run the xp_cmdshell extended stored procedure even when the user has permissions
3. To create CmdExec and ActiveScript jobs belonging to someone other than a SQL Server administrator.
4. SQL Server Agent jobs also must execute in the security context of a Windows account. If the job is owned by a member of the sysadmin fixed server role, the job executes using the Windows account under which the SQL Server service is running. If the job owner is not in sysadmin, the job executes using the SQL Server Agent proxy account.
The following Microsoft knowledge base article explains what is required to execute a DTS package from an SQL Server job. This will allow jobs scheduled by non-admin users (such as Bank staff) to properly execute DTS packages.
http://support.microsoft.com/?kbid=269074