How to disable encryption for the remote vpn clients in PPTP

Do not to use DHCP to assign an IP, and specify a range manually instead for the incoming connection. Thats what fixed it for me.

I guess I shouldn't just leave this unanswered forever when I have in fact solved the problem.

When I was hired, I was told that the LAN was "running out of scope". The network had a 24-bit subnet mask and uses DHCP for client addressing. The DHCP server wasn't set to check DNS before handing out addresses. DNS wasn't set to scavenge old records. RRAS was set to get addresses for VPN clients from DHCP, and by default it grabs blocks of 10. So it would grab blocks of 10 and start handing them out to clients, but as our address space ran out, some of them were "good" and some were already registered to other clients in DNS. I shortened the subnet mask to 22-bit and the problem was solved.