When activating Office 2010, one may encounter the following error :

The cause for this error is that the Activation does not support ‘Basic Authentication‘
You’ll need to adapt your Squid to bypass certain URL’s

HowTo :
Connect to Squid
Enter cd /usr/local/etc/squid
Type vi allowed.domains.acl
Add following URL’s :

• go.microsoft.com
• activation.sls.microsoft.com
• sls.microsoft.com
• crl.microsoft.com
• www.microsoft.com

Save your changes and restart Squid (/etc/init.d/squid restart)
Retry Office Activation and you will be presented with the following screen.