Perhaps I should have phrased the question differently:

Which option under netconfig is most appropriate for home desktop (single modem) users:
1). Static IP
2). configure eth0 with DHCP /*well, obviously not this one*/
3). Loopback (modem or no net)
In previous attempts, I have had no luck with choosing either Static IP or Loopback. the output from KPPP at connection time looks like this:
Opener: received SetSecret
Opener: received SetSecret
Opener: received OpenLock
Opener: received OpenDevice
Opener: received ExecPPPDaemon
In parent: pppd pid 1452
Couldn't find interface ppp0: No such device
Kernel supports ppp alright
Couldn't find interface ppp0: No such device
Opener: received OpenResolv
Opener: received OpenResolv
Opener: received OpenResolv
Opener: received RemoveSecret
Opener: received RemoveSecret
Opener: received KillPPPDaemon
Opener received KillPPPDaemon
In killpppd(): Sending SIGTERM to 1452
Opener: received RemoveSecret
Opener: received RemoveSecret
Opener: received OpenResolv
Opener: received OpenResolv
Opener: received RemoveLock
It was pppd that died
pppd exited with return value 5
Sending 1435 a SIGUSR1
and that's how KPPP connects for me. During the latter part of writing this note, the connection timed out so that's why it shows pppd dying (normally it doesn't do tha because I am busy doing stuff).
Currently my non-configured hostname is "darkstar" and my computer believes it has a local IP of 127.0.0.1. I think that from the above output of KPPP, that pppd still works just fine, but why? Shouldn't it need netconfig to set up a loopback or something? Thank you for your thoughts and comments.
