[reboot]

Dial-up is NOT networking, don't get confused.
You're trying to make a network connection, and you have no network (LAN or WAN) to connect with.
Something could be missing from Dial-Up-Networking.
Go into Add/Remove programs, windows components, and take DUN out of Communications.
Restart.
Go to Start > Run > and type in: inetwiz
That should rebuild DUN, and allow you to make a connection.