The XP Internet Gateway permits a disconnection.
As to your first question:
1. Check your antivirus software to see if it is not doing the dialing to check for updates. You need, due to the presence of ICS, to check both machines.
2. Other things to check.
I am just going to quote Kelly Theriot here, as she covers the most common things to check:
Check your settings here:
Right click the My computer icon (Desktop), open Manage/Services and Applications/Services. In the right pane scroll down to Remote Access Auto Connection Manager and double click it. Use the Startup type drop box and choose Disabled.
Network Connections/Advanced/Dial-Up Preferences/Enable Auto-Dial by Location/Uncheck all locations and Always ask me before Auto-Dialing.
Also check all programs with a Notification Area icon (system tray) for an option to disable or not start at startup. Most can be unselected here: Start/Run/Msconfig/Startup and/or removed from here: Start/Run/Regedit
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Run HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Run
Disable Automatic Modem Connections at Startup
If remote connections are enabled in Windows, the system may try to initiate an Internet connection at Windows startup or at the start of many applications. This setting disables that behavior.
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Ole. Value Name: EnableRemoteConnect, Data Type: REG_SZ (String Value), Value Data: "Y" = enable automatic connections, "N" = disabled.
Create a new String value, or modify the existing value, called 'EnableRemoteConnect' and edit the value according to the settings above. Exit your registry, you may need to restart or log out of Windows for the change to take effect.
Modify the Internet Auto-Dial Settings
Windows has the option to automatically dial your Internet Service Provider (ISP) to establish an Internet connection. This option can be controlled using this tweak.
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Internet Settings
Create a new binary value named "EnableAutodial", and set the new value to equal "01 00 00 00" to enable autodial or "00 00 00 00" to disable it.
Note: This restriction can be used either on a user by user basis by adding it to HKEY_CURRENT_USER or on a computer wide basis by adding it to HKEY_LOCAL_MACHINE.
To view the list of names and addresses recorded by AutoDial, type the following command at a command prompt: rasautou -s
To delete a name or address entry from the list: Start/Run/Regedit
HKEY_CURRENT_USER\Software\Microsoft\RAS Autodial\Addresses
You can delete any TCP/IP addresses that you see under this key. Note that AutoDial can use IP addresses, DNS fully qualified domain names (FQDN), and NetBIOS names.
source:
3. Popup removal starts with steps #2-#4 in FAQ608-4650
You might consider an anti-popup tool. I honestly like the free "Google Toolbar" for this. It just keeps getting better with every version. (You can Google for this).
4. Remember always that the dial-up can be initiated by either the ICS Host machine, or the ICS client machines. You need to check both workstations.