Do you mean it's an endless loop as in the modem dials, connects, then
immediately disconnects, dials, connects, .... etc?

I have this same problem on my system; 7.10 with Lucent modem (using
martian_modem drivers.) I have found a workaround. In the "manual"
network configuration I configured everything how I wanted it and saved
it as a preset, i.e. 'home'. The way I activate the dialup connection is
I open the Network Settings dialog, select the 'home' profile, and click
the apply button (the checkmark.) The modem will then dial and connect
normally. If I do it any other way I run the risk of causing a 'loop'.

All in all, modem support in Ubuntu is TERRIBLE. Another thing that
pisses me off is when my internet provider automatically disconnects me
every 12 hours, you can never tell how long it will take Ubuntu to
redial. Sometimes it's immediately, sometimes it takes a few minutes,
sometimes it won't dial at all and you have to go through a nightmare
fidgeting in the Network Settings dialog to finally get it to dial and
connect. It's ridiculous. I hope the developers will put some attention
to overhauling this crap. I won't get my hopes up though since it seems
as if everything these days is built under the assumption that the user
has broadband.

-- 
[network-admin] endless looping on dialup
https://bugs.launchpad.net/bugs/61178
You received this bug notification because you are a member of Ubuntu
Desktop Bugs, which is a bug assignee.

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