I'm using KPPP under GNome & dku2 cable.
Do you use a datacable or bluetooth to connect?
I'm also struggling with wvdial with dku2 cable and bluetooth. Could connect with dku2 cable but could not browse.
Could even ping the DNS Servers with good results.
With KKKP I just copied the init2 string over and left the rest of the settings
Here is my wvdial.conf maybe it can help you.
Init1 = ATZ
Init2 = ATQ0 V1 E1 S0=0 &C1 &D2 +FCLASS=0
Modem Type = USB Modem
Baud = 460800
New PPPD = yes
Modem = /dev/ttyACM0
ISDN = 0
Phone = *99#
Password = PASSWORD
Username = USER
Stupid Mode = 1