It also handles cookies and can dynamically determine whether or not it should proxify images and CSS assets.
CGIProxy also handles flash.
In fact, CGIProxy can fully proxify an SSL-encrypted GMail session out-of-the-box.
CGIProxy is _very_ mature technology. Take a look at the source code -- it handles 100's of special-cases.
Some of the special-cases that CGIProxy handles are truly bizarre. Reading through the CGIProxy source code is actually pretty fascinating.
This brings up an interesting point. If you're interviewing a software engineering candidate, ask them what their favorite language is. Next, ask them to write a simple HTTP server in that language. Finally, ask them to write a reverse HTTP proxy that works with the server they just wrote. This is a surprisingly effective way of separating the wheat from the chaff. Most people with CS degrees are completely incapable of doing this.