Value for network.proxy.http_port should be integer (no quotes should be used) and network.proxy.type should be set as 1 (ProxyType.MANUAL, Manual proxy settings)
FirefoxProfile profile = new FirefoxProfile();
profile.setPreference("network.proxy.type", 1);
profile.setPreference("network.proxy.http", "localhost");
profile.setPreference("network.proxy.http_port", 3128);
WebDriver driver = new FirefoxDriver(profile);