adding on to my previous post, the problems (at least what my mother-in-law had) were caused by a corrupt registry branch, which according to some page on microsoft's knowledge base, happens when you do a system restore to a date previous to installing SP1 (assuming you did) or a "reinstall in place".
it took 8 hours of talking to her over the phone to finally come to the registry tweak. since she has very little knowledge of computers, i felt that would be our last option before doing a reformat/reinstall.
i walked her through a reinstall in place but it didn't help. and since dialup was the only way she'd get on the net, downloading SP1 was not an option.
it was tough, but that reg tweak solved the modem problem.
my question to Mr. Deflok is: are you getting any errors? like error 5 or 711 or general errors about remote access connection manager, rpc...
this is the link to the reg tweak: <a href="http://support.microsoft.com/?kbid=329441">HERE</a> but i would only do that if you are getting the same errors with system restore and those errors i asked about.