I have posted this question to Naryan as private messages as I was not aware of posting a new question earlier. Now, having learnt to post, I would like to share the question and answer to all.

Question:
I am unable to launch the controller of Sahi when I connect internet. I have made required changes to the proxy setting but still not working. When I disconnect my internet connection and try to launch the controller by ctrl+alt + double click it works.

I use my mobile phone to connect to internet and phone is a 3g phone. Earlier I use to follow this step to work with the controller.

launch a browser page error will come as there is no internet connection, then launch the controller, then connect to internet and refresh the browser page and the controller page. This way I was able to manage. However now I couldn't I am getting error stating "The requested URL /_s_/spr/controller7.htm was not found on this server." when I refresh the controller page.

Answer:
Your problem seems to be because you are using IE and changing the proxy settings under LAN settings. Instead, if you navigate to Tools -> Internet Options -> Connections, you will see "Dial-up and Virtual Private Network settings". Under that you should see your 3G phone connection. Choose that, click "Settings" near it, and populate the Proxy Server settings that appear on that window. Sahi should then work. Remember to clear your browser cache too.