Sorry for the delayed reply. Have been reviewing your info. Not an easy one for long distance troubleshooting.
The DNS behavior you are seeing is normal. Generally, a DSL modem will forward DNS requests to the server in it's configuration.
As to the second NIC, pull it. Don't think it's the problem, especially if it is disabled, but I would eliminate the possibility.
Microsoft is not nice about providing good error messages here. Could be one or more of several things, but we have eliminated some with restoring your internet connectivity.
A) When trying to make the connection, try to ping the client's address from the server to make sure that the path back to the client is good.
B) Is the client behind a router? Has it been configured to pass PPTP like yours?
C) The VPN IP addresses should be on a subnet that is different than the subnet of the LAN on the server side. Looks like you are using 192.168.1.0 for the server LAN, so you could use 192.168.2.0 for the VPN IP's. If the client is using a router with NAT, it should be configured with a network address different than the VPN network IP. Also, if you ever want to forward traffic on either the client network or the server network, those addresses should be different as well. If these addresses are on the same subnet, the server and/or client will get confused about where to send VPN traffic. This could cause the error you are seeing.
D) Hate XP. Hate it. Maybe I'll get used to it eventually, but I have been avoiding it. Check the built-in firewall on the client side. It will need to allow the outbound connection to 1723/tcp and allow GRE both ways. Not sure how to configure that at this point, other than to upgrade to Windows 2000. Of course, if there is a router on the client side, it will need to be configured to pass the traffic as well.
E) When all else fails, install a packet sniffer to see if the traffic is going to port 1723 and if the reply is being sent, and to where. I like ethereal (
Works great and the price is right (can you spell f r e e ?).
E.1) Turn on ppp logging on the server. See
.
Make sure you turn it back off at some point. Can eat lots of hard drive real fast.
Hope some of this makes some sense as it is late. Post back and we'll try some more.