After installing RHLinux per manual (no problems) I tried to build a connection (sorry, I've forgotten what you call them) and dial in. I dial out and hear modem response tones but get no connection. I've looked at bug 8249 which seems similar. I haven't followed that reporter's attempted fixes since they didn't work. No bugs reported for PPP show any solution, so I've not investigated further. I know that my ISP's responding properly -- that's how I'm reaching you now, through my Windows system. Disk is partitioned with 1 Windows (500 M) and autopartitioning by your installer for the remaining 150M. Another problem: while trying to build the connection a second time, I removed the first one, both from the connection list and from the control panel. But it still exists somewhere, because when I tried to use the same connection-name it was refused.
You may have a leftover configuration section in /etc/wvdial.conf that still refers to the old connection's name. It should be safe to remove /etc/wvdial.conf and /etc/sysconfig/network-scripts/ifcfg-ppp* and try again. Please try this with the latest versions of rp3 and wvdial from Raw Hide (ftp://ftp.redhat.com/pub/rawhide/i386/RedHat/RPMS/).
Bug 8395 has been closed due to no action from original bug reporter. The wvdial code has improved greatly since RHL 6.1 and so it may be fixed. Please test against Red Hat's latest beta Phoebe and if it still happens with that modem and ISP, please open a new ticket against Phoebe or RHL 8.0