I was told they do not support linux.
This is a standard answer form any ISP. Ignore it, your linux system will work, you already know of one distro that does work.
Since your system connects directly to your DSL modem you probably need PPPoE installed in order to make a connection.
I know Mandriva has it in the repos, i would bet all the others do also. Once installed, you will need to do a little configuration. It has been a while since I used this type of setup. I have a router, most of them have PPPoE internally, so you don't need it on installed on your system. Any way, do a little googling and look for a HowTo for PPPoE ( point to point protocol over ethernet ).
Your ethernet card does require a IP address. Your modem will be assigned one by Bell South, that is a common way of doing DSL. Your ethernet card can be statically assigned, since you won't have a DHCP server, ( unless the modem is a DHCP server for your side ).
I'm sure Bell South will have a web site with IP address info. You may need to look up DNS addresses, gateway etc. You could always ask Bell, just don't say 'linux' to them.
Sorry, I can not help with question 2. Never used Backtrack. Is it a live CD, or one you install? The method to add packages can be quite different.