When using SDM to configure Cisco871, I have found I am unable to configure the pppoe encapsulation. I found the reason - the router rejects interface configuration command "pppoe enable" since versions 12.4(15)XY4 and 12.4(15)T7. Previous version can be configured using SDM without problem, and I could not test higher versions due to flash size. Have you similar experience?
I have this problem too.