Solution:
Microsoft has confirmed this to be a problem in their Windows 2000 Server and Advanced Server products.
WORKAROUND
Restart the server. If you cannot restart the server at this time, use the following method:
1. Click Start , point to Settings , click Control Panel , and then double-click Phone and Modem Options.
2. On the Modems tab.
3. Do not remove the currently installed modem that has a status of "Not present."
4. Click Add.
5. After the Add/Remove Hardware Wizard starts, click Next to allow Windows to try to detect the modem.
6. After the modem detection process is complete and no new modem is detected, click Cancel . You may have to close and open the Phone and Modem Options tool again, but the original modem should now be displayed as being connected to the appropriate port. Demand-dial and dial-up connections should function properly.