MPPE support is required for MSCHAPv2. Depending on the kernel version, you may or may not require to perform this step.
If you replace the FC kernel with v2.6.15 or above, MPPE support is built in the kernel already. To test if your kernel supports MPPE:
[root@pptp ~]# modprobe ppp-compress-18 && echo ok
If it returns an "ok", you can safely skip this step and move to step 7. If you see "FATAL: Module ppp_mppe not found.", install MPPE support as described in the following procedure.
The latest FC4 kernel at the time of writing is 2.6.14. It does not support MPPE, you will have to add this feature to it. Download the MPPE module builder in rpm format from here. The required RPMs are::
dkms-2.0.6-1.noarch.rpm kernel_ppp_mppe-1.0.2-3dkms.noarch.rpm
Install them with command "rpm -ivh".
[root@pptp ~]# rpm -ivh dkms-2.0.6-1.noarch.rpm [root@pptp ~]# rpm -ivh kernel_ppp_mppe-1.0.2-3dkms.noarch.rpm
If you upgrade your kernel to 2.6.13 or above, kernel_ppp_mppe version 1.0.2 or above must be used. Otherwise, the pptp tunnel will not connect and you will see error message "This system lacks kernel support for PPP." in /var/log/messages.
If you upgrade your kernel after installing dkms, thanks to the dkms_autoinstaller service, you will not have to worry about the dkms kernel module. dkms_autoinstaller runs on every bootup. It checks the dkms module to ensure it match the kernel version. If a mismatch is found, it will create a proper one for the boot kernel.
For dkms_autoinstaller to work, you will need the correct kernel-devel version installed in your system. It is always a good idea to install the kernel-devel rpm alongside with your new kernel.
FC4 comes with ppp-2.4.2-7. It is required to be upgraded to a patched version which supports MPPE. The patched version can be found in here. Download the rpm for FC4. At the time of writing, the latest version is 2.4.3-5. Get the FC4 rpm:
ppp-2.4.3-5.fc4.i386.rpm
Upgrade the ppp with the downloaded version:
[root@pptp ~]# rpm -Uvh ppp-2.4.3-5.fc4.i386.rpm
Note: If you are a Gentoo user, and are using kernel v2.6.15, the ppp-2.4.3-5 does NOT work because of MPPC. You may find more information from here.
In the same page download the pptpd rpm, pptpd-1.3.0-0.i386.rpm, and install it.
[root@pptp ~]# rpm -ivh pptpd-1.3.0-0.i386.rpm
Note: pptpd-1.3 is an experimental version. The stable version is 1.2.3. Both versions work fine for me. It is up to you to choose which one to use.