The DNE is only used by the Cisco VPN client and not the Microsoft PPTP native client. The only thing I could think of making it work, is that the DNE actually adjust the max mtu to less than 1500 to accomodate the extra IPSec
header. Your problem could be mtu related. Try uninstalling the Cisco VPN client (which takes off DNE), then on the W2K machine adjust the mtu to say 1400 (thru registry change) and connect via PPTP.