Privoxy is an "Anonomiser" which stops your IP "leaking" to the Internet when you make a request.
Or it is a proxy in its own right - that runs on your computer.
Privoxy is only a part of the Vidalia package ("bundle") that contains Tor and Privoxy - you don't need to use Privoxy to circumvent the Geo-IP filtering used by the BBC, ITV and other Internet providers for content that is produced for a specific geographic location. AND, Privoxy is not a responsible for the GEOip circumvention - that is what Tor does.
Vidalia is a cross-platform controller GUI for the Tor software - If Privoxy is also used then you are somewhat "invisible" on the Internet.
For more details on this section please see here
The screen-shot (that was shown) below is what you see when you select "status" from the Privoxy Window. However, this was taken on a computer where the BBC iPlayer was being watched from Canada.
Unfortunately, Privoxy only has one error message. So no matter what went wrong, it will tell you "resolve failed".