ok....here are the detailed instructions.I did exactly the same and it worked fine. I dont see why it shouldnt work for other modem models as well :
Note this is for the airtel modem which I have tried and tested. For other modems change the information as you see fit!!
STEP 1 :: Instructions for configuring modem settings
1) Open your web browser
2) Type "192.168.1.1" in the Address bar of your web browser and open the website
3) You must have reached the modem's admin page with the heading - Web Distributor
4) Click on configuration on the side menu
5) Click on WAN Connections
6) Enter your admin username and password (default is "admin" for both)
7) You may see an existing WAN Service with a name of "yoon-0"
8) Click on Delete to remove the existing service
9) Click on Create a new service
10) Select "RFC 1483 bridged" as the type of service and click on Configure
11) Enter any description and enter VPI=1 and VCI=32 (leave the rest of the options as they are)
12) Click on Apply
13) Click on Save Config in the side menu and save the new configuration
14) Go to Control Panel > Network Connections > Right Click on your LAN connection > Properties
15) Select Internet Protocol (TCP/IP) and click on Properties
16) Select the options "Obtain an IIP address automatically" and "Obtain DNS server address automatically" and click on OK
17) Close the LAN properties dialog and control panel
18) Restart the computer and the modem
STEP 2 :: Instructions for installing the pppoE dialer (for Windows XP users only)
1) Extract the file raspppoe.zip (here is the link for it : *rapidshare.de/files/1100965/pppoe.zip.html)
2) Open the Control Panel
3) Switch to Classic View
4) Open My Connections
5) Find your LAN connection icon, right click it and select properties
6) Click on install
7) Select Protocol and click on Add
8) Click on the Have Disk button and then click on Browse
9) Browse to the folder where you extracted raspppoe.zip file in step 1
10) Select the file "winpppoe.inf" and click on Open
11) The driver will now get installed. Click on the Continue button, if you get any windows logo-testing warning messages
12) If the driver was successfully installed, then a new item in LAN properties will appear - PPP over Ethernet Protocol
13) Close the LAN properties dialog and the control panel
14) Restart computer and modem
15) Go to Start > Run > Type "raspppoe" and press Enter
16) Select your ethernet adapter and Click on Query Available Services
17) In case you get an error message saying "No PPP over Ethernet service offers are received", see below to troubleshoot this error
18) If you see the Access Concentrators of the Airtel Servers in the list, then you have successfully installed the raspppoe dialer and you may continue with the next step
19) Go to Control Panel > Network Connections > Create a new connection
20) Click on Next > Connect to the internet > Set up my connection manually > Connect using broadband connection that requires a user name and password > Enter Airtel > Enter User Name as your phone number with STD code (eg. 01151787010) and your Airtel Broadband Account password > Click on "Add a shortcut to this connection to my desktop"
STEP 3 :: Instructions for testing your new connection
1) Click on the the new "Airtel (PPPOE)" icon on the desktop and connect
2) A new icon in the notification area will appear
3) Go to Start > Run > Type "cmd" > Type "ping google.com -t"
4) If the host is pinging successfully, then your computer is now connected to the internet successfully. Congratulations!
Instructions for troubleshooting the error "No PPP over Ethernet service offers are received"
1) Uninstall the newly created WAN service from the modem's admin pages and save configuration
2) Uninstall the newly installed PPP over Ethernet Protocol from the LAN properties
3) Delete the newly created pppoe dialup connection from Control Panel > My Connections
4) Reset the modem by inserting a ping behind it
5) Go to the modem's admin page > System > Restart > Select the option to Restore factory settings and restart the modem from there
6) Install the new WAN Service again by following instructions in STEP 1 mentioned above
7) Restart the computer and the modem
8) Install the raspppoe protocol again by following instructions in STEP 2 mentioned above
9) Create the new pppoE dialup connection again by following steps 18-20 in STEP 2 and test it as in STEP 3
In case you still get the same error, then maybe you have an older version of the Web Distributor II firmware.
Try your luck
(oh and thanks digen for pushin me to publish this !)