Hi, I'm using XP to connect to e-smith with pptp and I can't seem to get encrypted connections to work

If I remove required encrytion from XP the connection works.
I can succesfully connect from XP to my devil linux firewall with 128bit encryption vpn so the problem doesn't seem to be XP.
I checked my log I can't understand what's going on...
(Last modification to the server: I upgraded my kernel to include the I2O driver to boot on raid5)
Any help apreciated !
Copy of messages log::
Jun 23 02:21:11 intranet pptpd[7303]: MGR: Launching /usr/sbin/pptpctrl to handle client
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: local address = 10.128.250.253
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: remote address = 10.128.250.235
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: pppd speed = 460800
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: pppd options file = /etc/ppp/options.pptpd
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: Client 24.X.X.X control connection started
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: Received PPTP Control Message (type: 1)
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: Made a START CTRL CONN RPLY packet
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: I wrote 156 bytes to the client.
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: Sent packet to client
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: Received PPTP Control Message (type: 7)
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: 0 min_bps, 1525 max_bps, 32 window size
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: Made a OUT CALL RPLY packet
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: Starting call (launching pppd, opening GRE)
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: pty_fd = 5
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: tty_fd = 6
Jun 23 02:21:11 intranet pptpd[7304]: CTRL (PPPD Launcher): Connection speed = 460800
Jun 23 02:21:11 intranet pptpd[7304]: CTRL (PPPD Launcher): local address = 10.128.250.253
Jun 23 02:21:11 intranet pptpd[7304]: CTRL (PPPD Launcher): remote address = 10.128.250.235
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: I wrote 32 bytes to the client.
Jun 23 02:21:11 intranet pptpd[7303]: CTRL: Sent packet to client
Jun 23 02:21:12 intranet modprobe: modprobe: Can't locate module char-major-108
Jun 23 02:21:12 intranet pptpd[7303]: CTRL: Received PPTP Control Message (type: 15)
Jun 23 02:21:12 intranet pptpd[7303]: CTRL: Got a SET LINK INFO packet with standard ACCMs
Jun 23 02:21:12 intranet pppd[7304]: pppd 2.4.0 started by root, uid 0
Jun 23 02:21:12 intranet pppd[7304]: Using interface ppp0
Jun 23 02:21:12 intranet pppd[7304]: Connect: ppp0 <--> /dev/pts/0
Jun 23 02:21:12 intranet pptpd[7303]: CTRL: Received PPTP Control Message (type: 15)
Jun 23 02:21:12 intranet pptpd[7303]: CTRL: Ignored a SET LINK INFO packet with real ACCMs!
Jun 23 02:21:12 intranet modprobe: modprobe: Can't locate module ppp-compress-18
Jun 23 02:21:12 intranet modprobe: modprobe: Can't locate module ppp-compress-18
Jun 23 02:21:12 intranet pppd[7304]: MSCHAP-v2 peer authentication succeeded for admin
Jun 23 02:21:12 intranet modprobe: modprobe: Can't locate module ppp-compress-18
Jun 23 02:21:12 intranet pppd[7304]: found interface eth0 for proxy arp
Jun 23 02:21:12 intranet pppd[7304]: local IP address 10.128.250.253
Jun 23 02:21:12 intranet pppd[7304]: remote IP address 10.128.250.235
Jun 23 02:21:12 intranet e-smith[7338]: Processing event: ip-up.pptpd ppp0 /dev/pts/0 460800 10.128.250.253 10.128.250.235 pptpd
Jun 23 02:21:12 intranet pptpd[7303]: CTRL: Received PPTP Control Message (type: 15)
Jun 23 02:21:12 intranet pptpd[7303]: CTRL: Got a SET LINK INFO packet with standard ACCMs
Jun 23 02:21:12 intranet pppd[7304]: LCP terminated by peer (^VM-98U^@
Jun 23 02:21:15 intranet pppd[7304]: Connection terminated.
Jun 23 02:21:15 intranet pppd[7304]: Connect time 0.0 minutes.
Jun 23 02:21:15 intranet pppd[7304]: Sent 689 bytes, received 1710 bytes.
Jun 23 02:21:15 intranet pppd[7304]: Exit.
Jun 23 02:21:15 intranet pptpd[7303]: Error reading from pppd: Input/output error
Jun 23 02:21:15 intranet pptpd[7303]: CTRL: GRE read or PTY write failed (gre,pty)=(6,5)
Jun 23 02:21:15 intranet pptpd[7303]: CTRL: Client 24.X.X.X control connection finished
Jun 23 02:21:15 intranet pptpd[7303]: CTRL: Exiting now
Jun 23 02:21:15 intranet pptpd[5669]: MGR: Reaped child 7303