I use linode for this and while it works on other sites like pandora, no dice on hulu. I get a "sorry, unable to stream this video. check your internet connection" message. Figured maybe they ban IP address blocks belonging to known hosts.
Have you tried by setting up a VPN instead of just a proxy server? I'm wondering if it's possible that Hulu's flash doesn't respect the proxy settings.
As other users report no problems with similar setups but using different hosts, I don't think that's the case.