Let's start off by saying:
1) Before upgrading to WinXP SP2, the BT internet connection worked fine - yeah, I can hear the groans already.
2) I've read most, if not all of the forum posts on this subject
3) I've followed Mauricios instructions on BT Internet Sharing guide for WM2003, albeit for Ipaq.
4) I've installed WIDCOMM BT driver, and deleted the Microsoft Enumerator(?). That was another saga.
5) I've set the local pc BT Adapter to IP
6) I've upgraded to Firmware A05 on the PDA.
7) When the PDA is in the cradle, PIE works fine.

When I go through the Bluetooth Connection wizard on the PDA, and select the local PC as the device to connect through after it is discovered, the connection always comes up as a Dialup over BT Network, instead of LAN. I don't get the option to tell it to use the LAN, as shown in the guide.
When PIE starts up, it tells me that the Dialup connection could not be established.
I've been in the Configure Network adapter settings and tested a few things out, but with mixed results:
1) "Page cannot be found".
2) "In order to connect to the Internet, you will need to configure a proxy".

At times when I manage to ping the local PC from the PDA, I still can't access the internet.

Any suggestions?