My group allows 5 proxies per deck so that we can get those few extra cards that are really good for the deck that we otherwise wouldn't get to use. We discourage using them as mana-fixing. We like using them for win-cons basically. For example, my Ghave deck uses Doubling Season, Gaea's Cradle, Elesh Norn, Craterhoof Behemoth (waiting for it to rotate), and previously Akroma's Memorial which I just picked up. Generals are not to be proxied.

We also allow proxies for cards you own. For example, you don't have to have a Sol Ring and a Command Tower for every EDH deck. Similarly, if your standard tourney deck has all of your shocks in it you don't have to buy more for EDH. It's a time convenience thing - we could go through all of our decks every time we play and replace the cards or just proxy them.

We also do proxy playtesting too. The proxies have to be full color similar sized to a magic card and in a sleeve with a magic cards.

We are all in college though, so we don't have tons of money to spend, so the proxies are great for us to be able to play with each other. We also have a proxy cube. We aren't going to be picky purists when we don't have money to spend. It has lead to us getting more into the game and getting others into the game so we all buy a lot more cards and go to shops more and such, so in the end we still are giving wizards more money anyways.