If you download EdgeProxy.zip mentioned in the guide you will find two files proxy.off and proxy.edge along with BossPrefs plugin toggle to copy one of them to proxy.pac depending of your needs. See detailed description of the plugin in Readme.txt inside zip-archive. But even without this plugin you can manually do it.
If you copy proxy.off to proxy.pac you will get gprs/edge access directly from iphone.
Otherwise, copying proxy.edge to proxy.pac you will change iphone gprs/edge settings to get access through the 127.0.0.1:8118
Don't forget to reboot the phone after proxy.pac replacement.