in the <connection> scope of the file.
If the proxy has not user or password, then delete lines <user> or <pwd>.
It is better to change <disableport80> to
The password is not "encrypted", it's simply base64 encoded so that no unprintable characters make their way into shared.xml file.See Where are the proxy settings stored?
To figure out what text to put into <Pwd> tag:
echo -n "My Password" | base64