diald/pppd refused connection--PAP auth?

[Kenward Vaughan <kaynjay@igalaxy.net>]

Diald is my nemesis... Various attempts to get it working have failed to
connect me.  I'm using the stock conf files with the only changes being the
use of the ppp provider script for connecting, and trying to change "noauth"
to "auth" in the diald.options file to match the options I see in
/etc/ppp/ppp_options.  PPP connects with PAP authorization.

syslog messages I see immediately after connecting are:

Jun 14 22:13:07 kaynjay diald[29726]: Running pppd (pid = 29869).
Jun 14 22:13:07 kaynjay diald[29869]: Running pppd: /usr/sbin/pppd
-defaultroute -detach modem crtscts mtu 1500 mru 1500 netmask 255.255.255.0
auth nopersist
Jun 14 22:13:07 kaynjay pppd[29869]: The remote system is required to
authenticate itself
Jun 14 22:13:07 kaynjay pppd[29869]: but I couldn't find any suitable secret
(password) for it to use to do so.
Jun 14 22:13:07 kaynjay pppd[29869]: (None of the available passwords would
let
it use an IP address.)


my ppp_options file in /etc/ppp is:

asyncmap 0
auth
crtscts
lock
hide-password
modem
proxyarp
lcp-echo-interval 30
lcp-echo-failure 4
noipx

Can someone possibly, _please_, shed light on my inadequacies in this matter?? 
It'd be greatly appreciated.  I'll gladly forward other info as
needed/requested.

Additionally, I cannot understand the readme.masq file where it describes
Not using defaultroute (use addroute somewhere...).  What am I supposed to
do to masquerade?  I can set ipchains to not masq initially, but where does
this addroute come into play?  Not being educated as a geek leaves me in
the cold on this issue (among others).

TIA,

Kenward