This error is the result of having an improper Authentication and encryption policy setting in the Dial-Up Networking connection. Here are the steps in correcting this problem.
1.. Double click on 'My Computer'.
2.. Double click on 'Dial-Up Networking'.
3.. Select Village Online from 'Phonebook entry to dial'.
4.. Click on the 'More' button, and select Edit entry and modem properties.
5.. Click on the 'Security' tab.
6.. Be sure that this page matches the example below:
Bob Lin, MS-MVP, MCSE & CNE
Networking, Internet, Routing, VPN Troubleshooting on
http://www.ChicagoTech.net
How to Setup Windows, Network, VPN & Remote Access on
http://www.HowToNetworking.com
My VPN connect was successful once. Then when I tried to reconnect I
received error 732. Client computer is running Windows XP Pro and the VPN
server is also running Windows XP Pro.