I'm trying to explore how to set up a PPPoE connection on Ubuntu, for my housemate. The only Ubuntu machine I have access to now is a VM Player VM, and the connection doesn't seem to work. Normal internet works through sharing with the host, but if I disconnect the host's PPPoE, the guest doesn't seem to be able to establish its own.
If you are sharing the internet connection of your host system, you have probably set up a NAT connection for the virtual network card of your guest system. However, if you want to experiment with PPPeE on the guest system, you should enable a bridged connection.
Enabling Bridged Connection
Under Virtual Machine Settings->Network Adapter, enable "bridged connection".
In order for PPPoE to work you have to reach the modem on the link layer. Bridging provides for that, reloading the ethernet frames form your virtual network card onto the physical network (and vice versa).
NAT, on the other hand, operates on a higher level (the network layer), reloading only the IP payload of some etherent frames while discarding everything else (PPPoE frames in particular).