The PPP protocol (layer2) consists of LCP phase/ Authentication phase / NCP phase (network layer control protocol, it could IPCP / IPXCP etc depending on the layer3 negotiated).
http://cisco.com/en/US/tech/tk713/tk507/technologies_tech_note09186a00800ae945.shtml
When we configure an interface (physical or virtual) with “IP address negotiated” means we expect to negotiate & acquire an IP address from the remote peer (the IP address pool could be on the remote router or a DHCP server at the remote end) we are dialing into. Typically when we dial into an ISP we get an IP address from the ISP.
http://www.cisco.com/en/US/products/sw/iosswrel/ps5207/products_command_reference_chapter09186a00801d3406.html#wp1184978
For more info on PPP troubleshooting in general (using flowcharts):
http://www.cisco.com/en/US/tech/tk713/tk507/technologies_tech_note09186a008019cfa7.shtml
Thanks, Mak
