I've just installed Ubuntu 6.10 and have hit this problem having used
System -> Administration -> Networking to configure the modem.
/etc/ppp/peers/ppp0 doesn't contain noauth, unlike a much older version
of Ubuntu I used to use, probably 5.04. Consequently, pppd complains
during `ifup ppp0' as described above. The vanilla 6.10 install has
left me with gnome-system-tools 2.15.5-0ubuntu2.
** Changed in: gnome-system-tools (Ubuntu)
Status: Needs Info => Confirmed
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[network-admin] creates /etc/ppp/peers/ppp0 without noauth
https://launchpad.net/bugs/82378
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