Do ISP's still OFFER dialup? That's a bit like going to a car dealer and finding they still offer specials on a horse and cart
It looks like a call waiting issue from my reading of the error message. Dial up it was pretty critical to turn that off. It's even been known to kill broadband connections, so definitely turn it off. Odd that it only appeared since upgrading to IE8 though. Kind of makes me wonder if there's something more happening than appears.