I'm able to proxy using openssh's dynamic port forwarding without using tsocks, at least with microb on an N800 running OS2008.

At about.config I set the values for network.proxy.:
.socks = localhost
.socks_port = 3129
.proxy_remote_dns = 1
.type = 1

And the command I'm running to get SSH to proxy it is:
chmod 0600 /media/mmc2/key/my_openssh_privatekey_file.asc
ssh -D 3129 -i /media/mmc2/key/my_openssh_privatekey_file.asc username@hostname
(The private key stuff is something you might not have to deal with, in that case the chmod'ing and -i parameter would be extra.)

After that I have a bookmark to activate the proxy setting:
about:config?prefname=network.proxy.type&prefvalue =1
And this one to turn it off:
about:config?prefname=network.proxy.type&prefvalue =0

Pidgin works fine with the connection.

I'm not sure if Skype is using it because I can't seem to force it to use the SOCKS5 proxy. If it's not up it either isn't using the proxy or it's poking around and then connecting. I've heard from network admins that Skype is particularly nasty in this way, finding its way around firewall blocks. Hm if I can figure out how to block everything but SSH traffic from the tablet that would help me test.