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Fixed on master since 01/05/08, some boxes may still suffer.
Not a problem with all ISPS, only some (hopefully only 1!). We had this problem with planet prepaid. Optus accounts worked fine.
Gnome PPP and wvdial.conf could be involved. Edit wvdial.conf to ensure it has the following line:
Stupid Mode = on
The big thing is permissions issues.
Make sure /etc/ppp/pap-secrets and /etc/ppp/chap-secrets are owned by the group dip.
They should also have the following perms: -rw-r--r-- 1 root dip
You may need to do a chmod +r chap-secrets and a chmod +r pap-secrets
To change the group do chgrp dip chap-secrets and chgrp dip pap-secrets