I've set up a VPN connection in Windows XP. And when dial up to the company's VPN network; it first pops up a message "connecting to x.x.x.x", and then "verifying username and password" but it can't go any further from there and ends with an error code 721.
Can you tell me how to set up such a connection?
That Windows error code means that there was a problem establishing the PPP link. That problem is probably caused by Network Address Translation (NAT) in your router.
NAT allows the two computers in your home to share your cable modem's Internet connection by multiplexing their traffic onto one IP address. All traffic sent from your router to the Internet appear to be coming from the same IP address. When response traffic comes back from the Internet to your router, NAT needs to determine which of your PCs should receive that traffic. That isn't a problem with common Internet applications like web browsing and file transfer, but it's a big problem for VPNs. Your router is able to NAT properly while the PPTP tunnel is being set up, but after tunnel setup, PPTP uses Generic Routing Encapsulation (GRE), and your router probably can't figure out what to do with incoming GRE.
You need a router that supports VPN pass-through. A VPN pass-through knows how to handle this situation correctly. Alternatively, you might be able to get this working with a static NAT mapping on your router. With a static NAT, you configure your router to forward all incoming traffic to one particular host inside your home network. VPN pass-through or static NAT (or both) may help you overcome the error you're running into now. If you're lucky, your router supports these and you just need to enable them. If not, you can find these features in many inexpensive residential-grade routers.
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