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Stumbled across a way to watch Hulu without using a proxy server. It involves downloading a FF add-on and blocking ports. YMMV, but there are bunches of tips in the replies that may help.

For Windows:
How to Block TCP/UDP Ports Using IPsec in Windows Uma

Original link:
HULU BREAKTHROUGH!! I am watching Hulu in Canada right now! Without a proxy server. Anyone else care to test? : canada

I sure hope this works! Not for me but for the rest of the world.

Not free but In2Streams On-Demand TV - Internet TV - TV Online - Freedom to watch TV the way you want to! for $15 a month you can have access to a lot of shows. It replaced cable in my home and is doing me well out here in the giant sandbox.

Yeah I heard about this on Lifehacker... which is a shame, because it's gotten so widespread now that it's a matter of days, if not hours, before Hulu plugs the hole.

Especially since the fix seems really simple -- ignore the X-Forwarded-For header.