It isn't clear how you're setting this up. Do you have a PC that is connected to the internet and with which you are using "Internet Connection Sharing" to give the Xbox its internet access?
If so, you may need to set up "Internet Connection Sharing" again on the actual internet connection (modem connection) in the PC. There are instructions for doing this in my posting click here
PPPoE shouldn't come into it if you're connecting by ethernet to a PC as this will use TCP/IP protocol. In any case, ADSL in the UK uses PPPoA protocol and not PPPoE.