This morning I spent some time playing with WSE, .NET and Java. I knew Fiddler could listen in on conversations between IE and the world, but I never was able to get it to listen to conversations between me and well, me (ie: localhost). Turns out, according to the well named help page, that

“….NET will always bypass the Fiddler proxy for URLs containing localhost. So, rather than using localhost, change your code to refer to the machine name.”

Easy.