I am having the exact same problem, I have tried disabling compression (/etc/ppp/options noccp, novj, nodeflate) and I still get the hangup. I had it all working perfectly under Fedora 7, upgraded to 8 and have had no end of trouble.
As for the devices, plug in the modem, you only get ttyUSB0, as root 'rmmod option', unplug the modem, replug, and you then get ttyUSB0, ttyUSB1 and the on board storage appears as a CD-ROM. Havent figured out how to do that automatically yet though
As I said earlier I had it working flawlessly under F7, I'm not sure what breaks in F8 though.