What is an "outbound proxy"?

An "outbound proxy" is a system you send all your SIP requests to.

What should I set it to?

sip.onsip.com

While there are circumstances where a network administrator may require a different setting, the only setting that we currently support for "outbound proxy" is 'sip.onsip.com' (leave off the quotes please).

Must it be configured?

Yes.

The OnSIP Hosted PBX service will not work completely if the "outbound proxy" is not configured. Unless you have a concrete reason not to and clearly understand what you are doing, we very strongly recommend you configure the "outbound proxy" for your devices utilizing the OnSIP Hosted PBX service.