How to connect my private network using PPPOE.

First you put a cross-cable from your DSL to your PC (server 2003)and assign one IP address for the same network.(Meaning your DSL ip is 192.168.0.1 you need to put your pc 192.168.0.2 for the first NIC and you haveto put your PC's gateway 192.168.0.1).Then you will connect one straight cable from your server second NIC(External card) to your LAN Switch,assign 192.168.0.3 for second NIC and gateway is 192.168.0.2.(otherwise,you can configure your server as a DHCP or Proxy server). so, you can assign the LAN ip's from 192.168.0.4 upto 192.168.0.254 (it depends on the subnet),and you haveto put the gateway is 192.168.0.2 in your LAN systems.

Note:if you have a Static IP address, you can assign the static IP for the DSL and connect the cable for the same.So, you can use your system as a Web-server and also can access the clients.

1-When i plug the cross over cable to the external NIC to the DSL modem(nortel)the PPPOE will not connect to my ISP.

2-the external NIC 192.168.0.1
3-When i make the internal NIC 192.168.0.2 and the default gateway to point to the external NIC 192.168.0.1 my inside lan pc will not ping the gateway 192.168.0.1( weird) even when i put the gateway address(192.168.0.1) on the internal NIC.

what else should i try, i am currently using ICS but i don't really want to use it.

You should configure PPPOA (Over ATM) in your DSL, Then only you can get the internet from the DSL.