For the 7.04 LiveCD:
The CD's networking is designed with the mistaken assumption that anyone who is using it will be on some sort of broadband connection. If you are trying to run it on a system which only had dial-up internet access available, it is pretty much impossible to get it to establish an internet connection, due to the lack of any PPP GUI (such as GnomePPP), and the lack of configuration/documentation on the liveCD to set up and connect a dial-up connection manually.
Remember, there are still people who do not have access to broadband at home (living too far from the central office to get DSL, the cable company has not set up cablemodem access, etc.). These people could still get upgrades, etc. through the "apt-zip" utility, simply using the dial-up connection to run apt-get update to find *what* packages they need. Then some family member with high-speed access could retrieve the packages for later upgrade. However, all this *FIRST* requires the expectation that you could, in fact, be able to connect through your ISP's dialup at all.
I would suggest a desktop icon for configuring dial-up access would be the ideal option. Unfortunately, I do not have extensive access to a dial-up system to try it on (just once a week at my brother's house, where I'm trying to eventually migrate him off of Windows 2000). My only modem at home died about a year ago (I have cable broadband, so I haven't needed it).
A little late as far as the 7.10 beta goes, but I now have a modem at my house I could test this for in the next version (8.04). Since it would be at home, I can test it more often. Also would be able to test at the lab at work, just not as often (unless the beta has support for Connexant laptop soft-modems).