I notice that this problem is in BUG database from 2005 and nobody really took it very seriously. After I read all those "DNS Lookup Failure" reports I think it all boils down to the following:
When computer has more that one physical network interfaces jucie is always using only the one physical which was used at the time of installation. If connection is made through the other it fails on DNS lookup failure.
This maybe only my speculation, but here is description what happens to me:
I installed juice at work connected through the proxy and Ethernet socket all works perfectly. I come home and connected through the wireless connection disabled the proxy and I am getting DNS lookup failure.
Would be interesting to see in log window which interface is juice using.