Thanks for opening this issue.
You need to specify "/dev/ttyUSB0" with USB in capital letters.
This problem was fixed in gnome-ppp in karmic. It will show the USB
ports in the dropdown box.
** Changed in: gnome-ppp (Ubuntu)
Status: New => Fix Released
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gnome-ppp modem bug on /dev/ttyusb0
https://bugs.launchpad.net/bugs/386251
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