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I've have the latest version of kde and XFree86 and there is still a problem when i'm connected to the internet using kppp. The problem is that the X server (i use the Mach64 server) is refusing connection to all X applications so before going on the web i've have to start all applications i want to use during my kppp session.
This is actually not a problem with kppp or even KDE itself, but rather with CORBA. CORBA is trying to perform a reverse lookup of the hostname before starting any applications. I am assuming that your hostname is currently set to localhost.localdomain. This being the case, then you dial up to your ISP, the network scripts that get executed are assigning you a new hostname, and therefore CORBA is not able to perform that reverse lookup anymore and you see what happens. To solve this problem, give your machine a real hostname (check "man hostname") and then add this entry to your /etc/hosts file (mimic the entry which is already there for localhost) This way when you dial up, you will not get a new hostname (since you have already assigned one) and CORBA will be able to perform the reverse lookup because the assignment is given in /etc/hosts.