Baba, are you using XP? If so, just install both Privoxy and avast! WebShield.
Into avast! WebShield settings
uncheck the option 'Ignore local communication' in the first 'Basic' tab.
Then enter the number for the redirected HTTP port, in your case,
8118.
Configure your browser to use a proxy (like if you do not have avast!). I mean:
Internet Explorer: Tools > Internet Options > Connections > Lan Settings > Check 'Use a proxy server'.
Firefox: Tools > Options > General > Connections Settings > UnCheck 'Direct connection to the Internet' and check the proxy.
Then, use:
Server:
127.0.0.1or
localhostand the port used by Privoxy, in your case,
8118.
It's easy...