Allen,
Try hooking the modem directly into the PC, without the switch, if it works fine then you know there is an issue with the switch. If it doesn't work then you have isolated the issue.

Now you can work on the modem. If you rent it, then I would suggest you contact your provider and request a replacement unit as soon as possible. If you own it, contact the manufacturer about a return/replacement.
If the manual configuration of the TCP/IP settings fails it's most likely an incompatibility with SP1 and your modem. I'd recommend not installing SP1 until your company sorts out the SP1 incompatibilty, that is if it worked prior to installing SP1.

If you do away with SP1 I highly suggest you to run all of the critical updates from MS just to keep your machine up-to-date.
Hope that helps,
BB