Your steps wrong liao, you're supposed to run "startServer.bat" before you run "startGUI.bat". In either case, you don't really need to open startGUI.bat. Only "startServer.bat" is important.
Means there's an error. Open the command prompt. Go to where you unzipped paw and run the startServer.bat file from there. You would be able to see the error now. The command prompt would look something like this
CODE
C:\paw>startServer
Check your firewall settings on your PC and on your router. Instead of spending time setting up different rules for testing, just disable the firewalls. If the proxy works, then we know its a firewall setting. If not, the problem lies elsewhere. So lets hunt it down

As for those who asked about using PAW as a socks4/5 proxy. Sorry PAW is a HTTP proxy, it doesn't handle socks4/5. It wouldn't really matter anyway as tmnet checks the actual packet. Even encrypted connections have problems.
To those who have problems with this, try downloading the latest JAVA version. Document the steps you have done and post them here if it still doesn't work. Then we can hunt for the problem.
Lets keep this topic about BT proxy connection and not go off topic discussing other areas where tmnet is blocking us.
i try to startgui after that and still not connected...