Point-to-Point Tunneling Protocol (PPTP) is one option for setting up a virtual private network (VPN). PPTP is supported by Windows products and is commonly used for this reason.
PPTP is an extension of Point-to-Point Protocol (PPP). It allows for the transport of various network layer protocols (IP, IPX, NetBEUI, etc.) through its tunnel. From a security standpoint, PPTP is not recommended. Its authentication options are PAP and MS-CHAP (a Microsoft adaptation of CHAP). For encryption, PPTP relies on Microsoft Point-to-Point Encryption (MPPE), which has known vulnerabilities. If possible, other VPN options such as L2TP are to be preferred over PPTP.
In PPTP, a PPP payload is encrypted first and then wrapped with a PPP header and GRE header for transport over an IP network. A complete set of network encapsulations for PPTP would be as follows:
See: RFC 2637.
References:
http://technet.microsoft.com/en-us/library/cc771298(WS.10).aspx