I found a lot of people having the problem of their Apache hanging when trying to use it as a USB modem despite following all instructions.  I didn't find anyone who had solved this and resorted to ringing Telecom support and eventually managed to get the solution from them - this is being posted while using my Apache as a USB modem.
There are a few gotcha but I suggest the following will work:

1.  Use the software that comes on the supplied CD-ROM from Telecom
2.  You must start the WModem software on the phone before plugging it into a USB port on your computer.

Unfortunately you then have to ring the 0800 116 110 number and choose option 2 or try to get a human and ask to speak to the Telecom Advanced Wireless help people.  I spoke with a person called Raj who asked me to dial a series of numbers starting with the # key and then make some changes to the settings and reset the phone.  Regretfully I did not note these - will try to get them and post here for others but if you persist Telecom do have the solution.  Since doing this the phone has worked fine.