Do you remember the package you installed? That might have something
to do with it. My thinking here is that it might be causing you to
dial on bootup, and in that case I would recommend uninstalling it.

You should be able to find the /etc/init.d related in one of the
/etc/rc* related directories that is causing dialup to kick in during
bootup. My thinking is that uninstalling the package would eliminate
that, saving you from making any required low level edits (where one
always has to be careful if that approach is taken and you know what
you are doing).

I run with a USR 5686E external modem, and a 56k dialup account.

Although I run exclusively in a RAM-based (1GB) Live CD Hardy
environment (not from my install RH3 Fedora Linux - I do have it set
up the same), my setup is entirely using /etc/wvdial.conf, so given
some 8 or so phone numbers from my ISP for local access, I simply
issue the command:
$ wvdial phone1
where phone1 up to phone2 are configured for specific local access
phone numbers to my ISP.

Linux has traditionally required an external modem, and it sounds like
you have one that is external.

I would try uninstalling the modem related package, and setup the
/etc/wvdial.conf file for different local phone access numbers to your
ISP.

The modem worked fine after I added the package, FLDIGI (ham radio program), and
afterward surfed the web, etc. Now I can't connect via the modem. I hate to
remove the package as I use dial-up and it took a long time to download, I'd
sooner reinstall the older version of UBUNTU.

I tried sudo ifdown ppp0 as suggested and got "unable to resolve local host"

I tried the wvdial suggestion and got an error message with that.

As I said before, v6.06 worked fine, why did they have to change it?

I should have mentioned that those two commands will often
produce lots of error messages, especially if you use the
"firestarter" firewall. But, for me, at least, they work perfectly
anyway. Have you tried them both, in sequence, ignoring error messages?

sudo ifdown ppp0

(enter your password when requested)

sudo ifup ppp0

(probably won't request your password a second time)

What error message did you get with wvdial?

What is the content of your /etc/wvdial.conf file (without any account
or phone information)?

Here is a template you can use for /etc/wvdial.conf setup, just make
sure you have already symbolically linked your /dev/modem file to
/dev/ttyS0, and after you have it configured you should also make sure
that the it has the file attributes as follows:
-rw-r--r-- 1 ubuntu dialout 1248 2008-09-28 17:47 /etc/wvdial.conf
Note: the symbolic link should be:
lrwxrwxrwx 1 root root 10 2008-10-23 06:55 /dev/modem -> /dev/ttyS0
This assumes that your modem is detected at /dev/ttyS0, if not, try
/dev/ttyS1. Fill in the fields annotated as <> with the information.

To connect to ISP with wvdial command:
$ wvdial phone1
...etc
========================file /etc/wvdial.conf template================
[Dialer Defaults]
Modem Type = Analog Modem
Modem = /dev/ttyS0
Baud = 115200,N,8,1
SetVolume = 2
Dial Command = ATDT
Init0 = HUP
Init1 = ATZ
Init2 = ATDT;
FlowControl = CRTSCTS
Username = <>
Password = <>

[Dialer phone1]
Dial Prefix = 1
Phone = <>
Area Code = <>
Inherits = Dialer Defaults

[Dialer phone2]
Dial Prefix = 1
Phone = <>
Area Code = <>
Inherits = Dialer Defaults

ditto

My wvdial.conf is empty, tried editing in a terminal window with "sudo" but was
not able, probably using wrong syntax or something. How do I edit a file as
sudo?

The program downloaded packages fine when first installed but now won't. The
parameters, phone number, user, etc were saved but if they aren't in wvdial.conf
where would they be? What changed when I ran UBUNTU the 2nd time and why?

Use the command:
$ sudo gedit /etc/wvdial.conf
or
$ sudo vi /etc/wvdial.conf

Vi requires you to open up a line for editing with the 'i' character
for insert from the location position on a line, and 'ESC' to close
the open line for editing.

gedit is easier.

Visit your ISP on another computer to record the phone numbers (aside
from the 1 and three digit area code they are 7 numbers no dashes.