If you're having trouble with networking on both the host and guest machines, and are running Microsoft Virtual Server 2005 on a broadcom network card, the chances are that you're running old drivers. Update them directly from the broadcom website and you should be good to go. Interestingly it appears that IBM, and Dell, are still distributing installation aids with the older drivers, which cause issues in this situation. To be relatively technical it appearsthat arp packets aren't responded to or sent out correctly.

Able to connect, but appear not to beable to recieve any packets? Go into the properties of the VPN, go to security and untick “Require data encryption (disconnect if none)". In XP < SP3 this has always been ticked for my tunnels and I've never had a disconnection, but it appears that something in SP3 RC0 makes some behaviour change, but doesn't actually disconnect the tunnel. I've not discovered why this happens, but this has fixed it on my main desktop and on my virtual machines.