I have had this problem on three seperate systems running RedHat Linux 6.0. Whenever Kppp has an active connection any requests to open any program is met with absolutly nothing I can't even get a terminal to open. But sa soon as you disconnect the Kppp connection everything workd fine. This problem has occured in both KDE and GNOME.
Can't reproduce it on 4 different machines. Does the problem occur only with kppp (i.e. can you run anything when you open the ppp connection with, say, linuxconf)? If so, you might want to try updating your KDE packages to current. If the problem occurs with every ppp connection, you might want to update your kernel and ppp packages to current.