While configuring a new Windows 7 laptop I attempted to setup a new VPN connection. It kept defaulting to a dial-up connection. I verified the steps I was taking on my own Windows 7 laptop and then repeated it again, but it had the same results. I tried copying the VPN connection to the system and it still would try to use dial up. I tried setting up the VPN using the local administrator account, domain administrator account, and domain user account only to find the same results each time. I even disabled and uninstalled the modem and it still default to dial up.
After some research, I opened the device manager, enabled the “Show hidden devices” option, and under “Non-Plug and Play Drivers” I found NDProxy with a yellow exclamation mark. [more]
NDProxy, according to Microsoft is "a system-provided driver that interfaces NDISWAN and CoNDIS WAN drivers (WAN miniport drivers, call managers, and miniport call managers) to the TAPI services" - see http://msdn.microsoft.com/en-us/library/ff568322.aspx for more details. NDProxy has been linked to slow boot, BSOD and other issues in Vista.
To fix the problem right click on NDProxy and select properties, go to the second tab (Driver) and look at the “Current Status” section, it says it is “Stopped”. Choose the option to start it then reboot. (Do not change the startup type) After the reboot NDProxy will no longer have an exclamation icon (i.e. it started OK) and it shows “Started” in the “Current Status”.