error 778 when connecting to Win2003 VPN server with Windows XP client

Scenario 1
If the server has CHAP and MS-CHAP checked on the Security tab
and the client has Typical with Require Secure Password in drop down on
the Security tab
the VPN can be established

Scenario 2
If server has MS-CHAP and MS-CHAP2 or just MS-CHAP2 on the Security tab
and the client has Typical with Require secure Password in drop down
and Require Data Encryption checked on the Security tab
the VPN cannot be established - error 778 after Verifying username and
password

I am not 100% sure but I believe the issue started after we setup IAS
on the server because of RADIUS issues with a mica modem router.

I need to get Scenario 2 working because I want the client to be able
to just put in the IP of the server and leave the defaults which is
what Scenario 2 has.

MS-CHAP2 imposes a higher level of security on connections. Each end has
to be able to identify the machine at the other end. Error 778 means that
the client cannot verify the identity of the server, so the connection is
rejected. It could well have something to do with changes you made to the
server when you installed IAS.

Jason wrote:
> Scenario 1
> If the server has CHAP and MS-CHAP checked on the Security tab
> and the client has Typical with Require Secure Password in drop down
> on the Security tab
> the VPN can be established
>
> Scenario 2
> If server has MS-CHAP and MS-CHAP2 or just MS-CHAP2 on the Security
> tab and the client has Typical with Require secure Password in drop
> down and Require Data Encryption checked on the Security tab
> the VPN cannot be established - error 778 after Verifying username and
> password
>
> I am not 100% sure but I believe the issue started after we setup IAS
> on the server because of RADIUS issues with a mica modem router.
>
> I need to get Scenario 2 working because I want the client to be able
> to just put in the IP of the server and leave the defaults which is
> what Scenario 2 has.