A VPN carries data between two end points through one or more networks. The network path between the two end points is called a route. At one end, the VPN client isolates data packets (relatively short strings of data, with error checking and address information added) by attaching an additional block of data (a header) to each data packet or frame that contains information about the address of the other VPN end point. At the other end of the route, the VPN server removes the VPN header and treats each packet or frame just like packets and frames that come from local network clients (when the server returns data to the client, the same thing happens in the other direction).
Several formats exist for tunneling headers, so it's essential that the two ends of a VPN link use the same format. The most common protocols, or sets of rules, for VPNs are Point-to-Point Tunneling Protocol (PPTP), Layer Two Tunneling Protocol (L2TP), and Internet Protocol Security (IPSec) mode. IPSec tunnels can only operate across TCP/IP networks, but PPTP and L2TP also work with Novell NetWare and NetBEUI connections. In practice, both NetWare and NetBEUI networks are rapidly becoming obsolete.
Both PPTP and L2TP can provide secure VPN connections, but they use slightly different approaches. The relative advantages of each method include:
L2TP provides more types of security and authentication than PPTP.
L2TP connections provide stronger authentication.
L2TP packets are always transmitted in encrypted form.
PPTP can work with computers using any version of Windows back to Windows 95, but L2TP only works with Windows XP and Windows 2000.
When you add a VPN connection to your own computer, the choice of PPTP or L2TP will depend on the type of connection used by the VPN host. When you set up the connection, Windows detects the type that the network host uses, and automatically set your end of the link to match it. If you're using a manual configuration, your help desk or network manager should tell you which version to use.
For a more technical explanation of each VPN method, look at Microsoft's white paper on Virtual Private Networking (http://www.microsoft.com/windows2000/docs/VPNoverview.doc).