help needed with configuring dial-in ppp server

hello everyone!
i am having some problem configuring my Red Hat Linux 7.2 machine(I.P address is 192.168.0.1) to work as a dial-in ppp server. In addition to the Red Hat Machine i have one more machine (I.P address is 192.168.0.3) that runs windows2000 professional..i just wanted to study the working of dial in servers..here are the steps i took

1. i edited my /etc/inittab file to have the following line in addition to others
S0:345:respawn:/sbin/mgetty -s 38400 /dev/ttyS0
2. changed the permission on pppd so that it is setuid root
chmod u+s /usr/sbin/pppd
3. next i added a ppp user by the name pppuser and gave him a password which is pppuser.
next i edited the /etc/passwd file so that it reads
pppuser:x:503:504:pppuser:/home/pppuser:/usr/sbin/pppd
4. created the options file in /etc/ppp/ ...the file contents are

asyncmap 0
netmask 255.255.255.0
proxyarp
lock
crtscts
modem
login

5. created the file options.ttyS0 in /etc/ppp/ ...the file contents are
192.168.0.1:192.168.0.10
6. entered the following in the /etc/ppp/pap-secrets file
pppuser * pppuser

7. ran the command telinit q

i had a friend of mine to dial into my computer modem. his session just hanged without much happening..however when i change the entry in the passwd file so that my friend gets a bash shell he i able to log in without any problem and was able to run commands...i checked out several articles on the net and i think my configuration looks very much like the sample configuration files given on the net..but i am not able to figure what is wrong..the aim of the whole setup is that when my friend dials my linux machine from his windows machine he should get an ip address of 192.168.0.10 and he should be able to access the share on my windows professional machine which has an ip of 192.168.0.3..
sorry if this may sound like spoon feeding but i have read enough articles..could someone point out the mistake in the above or provide me with a file that would work with the above setup..

thank you all for your time...

with regards
scorpion