When I sent the original message, the formatting has been completely removed.
So, I guess it is slightly difficult to understand the contents. Therefore, I
posted the message on the ubuntu forums. Please find the link below for the
message regarding my vpn
problem:ubuntuforums.org/showthread.php
If you have any ideas, please let me know.

Setting the remote client to connect to 192.168.1.3 is incorrect. You need it to
"call" the IP address of the router. From the Ubuntu desktop (VPN server),
connect to a site such as http://whatismyipaddress.com/ and note the IP address
it displays.

How stupid I was. I found my ip on that website and that was completely
different from 192.......
After finding my ip, I restarted my pptp server using the command "sudo
/etc/init.d/pptpd restart". But, still I am getting the same Error 807 from my
windows machine. The syslog file is not detecting any incoming connection
either. I was wondering that can you please guide me on what else I am doing
wrong here.

I haven't had any experience with pptp (it's said to be fairly insecure)
but I've used openvpn on linux for many years with excellent results.
It's in the repositories, so easily installable on ubuntu. The openvpn
website has free mac and windows clients for download. That would be
IMHO a better way to go, if you can.

I will check the router settings for GRE47 and read more about it. I was reading
on a website that for a D-Link router we do not need to do any settings for
that. The only thing needed is to port forward to 1723. I will double check it
and get back.

I read alot of people using OpenVPN. But, from what I read, there is not
much learning curve associated with it. And, I thought that if once I learn the
nuts and bolts I will move on to more protocol e.g. L2TP, IPSec etc.

In my experience, setting up the router's port forwarding is the trickiest part.
Check that part again. I think protocol 47 (GRE) is part of it.

OK, the networking class was a few years ago, but I still use it quite a
bit...

Isn't part of the problem that the address you're trying to use on the
remote site isn't seen as outside the remote site's network segment? The
address you're trying to connect to is in the 192.168 range. Those are
internal, non-routable addresses. That is, that's the address that's
seen on the LAN side of your home router. What you need to connect to is
to the IP of the WAN side of your router, which will be some standard,
routable Internet IP address. If you're not sure what it is, you can try
Shields Up at www.grc.com, which will dig it out for you. Also worth
testing your integrity there, so you know if you're "showing" too many
open ports on the WAN side of your router.

Anyway, the IP address shown there is the IP address that shows on the
Internet, which is where you're going to get to your home system. The
way you're configured now, it's looking for a machine at the local
address 192.168.1.3 and telling you it doesn't exist (which would happen
if your local router at the remote site was dispensing addresses in,
say, the 10.0.0.0 segment, which is also not routable, but not in the
same network segment as the address you're requesting).

Now, the NEXT step, which is how to tell your home router, when you've
properly reached it, which private address behind it you want is one
step I haven't tried yet, so I'll leave that to someone who uses VPNs
more. May use the answer, if someone has it, myself.