The proxy account doesn't need any rights within the database. I beleive that it doesn't need many rights on the SQL Server's OS either. It's needs to be able to be impersonated, and it needs rights to do what ever you want the users to be able to do (copy a file, move a file, delete a file, etc).
Denny
MCSA (2003) / MCDBA (SQL 2000)
MCTS (SQL 2005 / Microsoft Windows SharePoint Services 3.0: Configuration / Microsoft Office SharePoint Server 2007: Configuration)
MCITP Database Administrator (SQL 2005) / Database Developer (SQL 2005)
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