Here is a short AppleScript I wrote in order to make it easier for tech support folk to help out customers with this problem (it's a quick hack - use it as such).
display dialog "This script disables CHAP support in Mac OS X. You will now be asked for your admin password in order to modify a system file (/etc/ppp/options)." buttons "OK" set normal_command to "touch /etc/ppp/options;chmod a+w /etc/ppp/options;echo \"refuse-chap refuse-mschap refuse-mschap-v2\" > /etc/ppp/options;chmod a-w /etc/ppp/options" do shell script "sh -c " & quoted form of normal_command with administrator privileges display dialog "Thank you. To re-enable CHAP authentication, remove the /etc/ppp/options file." buttons "OK" giving up after 5