A CRJ700 flight crew experienced a PROX SYSTEM FAIL message after takeoff. They declared an emergency; ran the procedure; and returned to land at their departure airport.

Narrative

After takeoff at about 500 FT; a 'Proximity System Fail' caution message illuminated. We completed all normal checklists and continued flight. I; as Pilot in Command and Pilot Flying; took over communications with ATC. I instructed the First Officer to consult the checklist for this caution message. In reviewing the checklist we found that a manual gear extension was required; and systems such as nosewheel steering would be disabled. At this point I had the First Officer contact Maintenance Control. After reviewing our situation; Maintenance Control requested us to return to ZZZ; and we complied. We declared an emergency because of the required manual gear extension and possible loss of nosewheel steering. The Flight Attendants were advised that we had declared an emergency and were returning to ZZZ and prepare for a normal landing with a possible gear and nosewheel steering problems. Following the checklist; the normal gear extension handle was placed in the down position. At that point; the gear extended normally and the caution message went away. After a brief discussion and further review of the checklist; I elected to suspend the emergency procedure and continued on with a normal landing. Prior to landing; ATC was advised that we had normal indications and they communicated that they observed that the gear was down and appeared to be normal.