I can sympathize with the modem problems you have been having. But I 
didn't have them with an external modem and Redhat 7.3.  I have had the 
same problem you describe with Mandrake and an EXTERNAL modem though.
I must be configuring the PPP dialer incorrectly.  I can get the modem 
to dial in to my isp, then i get a receive error and it disconnects. I 
am thinking it is that I have nothing in  the  " run program after 
connect" script box under the PPP tab ; not sure what to put in here.
Anyway, this is a machine i am setting up for someone else; so if i 
can't set it up for them; it will have to become Redhat. Since I know 
how to set that up.
What was your solution on the problem of disconnect after first 
connecting to your isp?  Maybe i can try the same.

Betty - liking redhat better than mandrake at this time.