PPP and SLIP are Internet standards for transmission of IP packets over serial lines.
A compromise between a direct internet connection and host dial-up access is to use SLIP (Serial Line Internet Protocol) or PPP (Point to Point Protocol). From now, we'll just say SLIP/PPP to refer to both SLIP and/or PPP - they are similar in several respects.
SLIP/PPP provides the ability to transport TCP/IP traffic over serial lines, such as dial-up telephone lines, between two computers. Both computers run TCP/IP based network software. This allows a home user to get direct internet access from their own PC with just a simple modem and a telephone line. For many users, this is an exciting way to gain internet connectivity at a low cost. With SLIP/PPP, you can run your favourite GUI based web browser, ftp client, email client etc - right from your own PC.
SLIP/PPP is really a form of direct internet connection in the sense that:
Both SLIP/PPP and normal dial-up access (sometimes referred to as a "terminal session") involve dialing into a remote computer system (which is directly on the internet) and logging in. Some people may have difficulty understanding the difference. The key distinction is that with SLIP/PPP, your own PC is communicating using native IP with other computers on the internet while with normal host dial-up, your PC simply acts as a dumb terminal to the remote computer which then communicates with other computers on the internet using native IP. When you run a ftp client with host dial-up, the files you receive are stored on the remote computer. With SLIP, however, the files are received directly on your own PC. You can run GUI based clients (telnet, web browsers, etc) on your own PC and directly make use of internet services.
SLIP and PPP are relatively similar, but there are some key differences. PPP is a newer protocol, better designed, and more acceptable to the sort of people who like to standardize protocol specifications.
PPP has some additional benefits. Unlike SLIP (which can only transport TCP/IP traffic), PPP is a multi-protocol transport mechanism. This means that PPP not only transports TCP/IP traffic, but can also transport IPX and Appletalk traffic, to name just a few. Better yet, PPP lets you transport all of these protocols at the same time - on the same connection.
This is often not a concern for most users since their purpose of either using SLIP or PPP is to connect to the internet and the internet uses TCP/IP only. Therefore, there is no need to transport other protocols.
With SLIP, you have to know the IP address assigned to you by your service provider. You also need to know the IP address of the remote system you will be dialing into. If IP addresses are dynamically assigned (depends on your service provider), your SLIP software needs to be able to pick up the IP assignments automatically failing which you have to setup them up manually. You may also need to configure such details as MTU (maximum transmission unit), MRU (maximum receive unit), use of VJ compression header (ie., CSLIP), etc. All these can get confusing pretty fast.
PPP addresses their problem by negotiating configuration parameters at the start of the connection. Their can greatly simplify the configuration of your PPP connection.
Most SLIP/PPP software can dial-up and automatically login for you. However, they often depend on your service provider's system sending out standard prompts (eg, "login:" to get the login name and "password:" to get the password). If the server prompts are inany way non-standard, you either need to write a script to automate the login process yourself or login manually in the terminal emulation mode of your SLIP/PPP software.
PPP provides two methods with which logins can be automated - PAP (Password Authentication Protocol) and CHAP (Challenge-Handshake Authentication Protocol). Both provide the means for your system to automatically send your login userid/password information to the remote system.
The most significant advantage PPP can offer is the automatic login and configuration negotiation. With these features, your PPP software only needs to know your login userid/password and the telephone number of your service provider. The software can then dial-up into your service provider and figure out everything else on its own.
At this present point in time, PPP is generally not as widely available as SLIP. It should gain more acceptance in the time to come, but in the meanwhile, don't worry if you can only use SLIP. Once connected, PPP doesn't give you more of the internet than SLIP already can.