[pptp-server] The computer you're dialing in to does not support the data encryption requirements specified.

[Steve Host]

I was writing to figure out why this wasn't working (encryption) and in the
process i figured out my problem. Hence, this message will serve as a
solution to all you who search this list and find yourself here looking for
a solution:

Problem: You've compiled encryption into PPPD, reloaded PPPD, compiled,
installed your new modules, and all seems to be working, except that when
you enable data encryption on clients (I only tested Windows clients) it
doesn't work, and you get the error similar to title of this message.

Why?

Check your /etc/pptpd.conf. If you have a line:
options /etc/ppp/pptpd.options

and in this option file you have your PPTPD options such as nolock, +chapms,
+chapmsv2, mppe-40, mppe-128, etc
and you also have your /etc/ppp/options file (should be pretty empty), then
there lies your problem:

Remove that options /etc/ppp/pptpd.options file from your ppptpd.conf and
instead, take that pptpd.options file and append it to your
/etc/ppp/options. In other words, only use one options file for PPP, not
two.

This (for some reason unknown) fixed my problem and data encryption seems to
work fine now.

So this brings closure for me. Thank you very much to the PPTPD community
here. I hope this adds to the wealth of knowledge this community brings.
Good luck to all of you. I'll be back here first if somethign new crops up.
Cheers

- Steve