First off, it would be best to define what a proxy is, so that you might understand what the server is talking about, and why you might be banned for using one.
A proxy is a program that allows someone to relay his/her connection through the host machine.
In otherwords, lets say I lived in the US, and I wanted to make someone think I lived in the UK, I would have to setup, pay for, or find, a secured proxy in the UK. This would allow me to connect to the proxy, and then the proxy would bounce my connection to anywhere on the Internet. Of course, these can be used for adding a layer of anonmity to one's online presense.
A secured proxy is one that requires authentication, i.e. I would have some way of verifying myself to the proxy, so that it knew I was allowed to use it. An unsecured proxy lets anyone and their neighbor martian connect and use it.
Why is this a problem? Well, using google, one can find thousands of open/unsecured proxys, and of course, some of those people will be malicious, and have written programs to utilized them, and produce what is known as a "bot flood". Unsecured proxies are sometimes easy to detect, other times, they are not so easily seen, however, most can be detected by checking a few simple things with a user's IP address.
Therefore, IRC networks have deployed "proxy scanners", which try to catch some of te open proxies, before they can be used against the network.
If you don't know what a proxy is, chances are you are not intentionally using one. However, if a network is saying you ARE using one, and you haven't a clue what it is, (I believe this is your scenario), then there is a chance your computer has caught a virus that is making your computer INTO a proxy.
I would recommend you update any virus scanner software you have, and go and download a decent firewall (Sygate Personal Firewall, I've found to be very good), and try to disinfect your computer. Sygate's website also has a great network security check, where they'll scan some key ports on your computer for free.
You can use Sygate PF to catch any programs that want to use your outgoing network, or try to be a server (proxies). I would also recommend you go to
http://housecall.trendmicro.com and perform their free virusscan and other malware checks, as Trendmicro's virus scanning products tend to be very good.
