Many ISPs and corporate PPP servers use PAP. If your server does not require you to use PAP (if you can log in manually and receive the standard user name/password text based prompts it does not use PAP), you can safely ignore this section.
Instead of logging into such a server using a user name and password when prompted to enter them by the server, a PPP server using PAP does not require a text based login.
The user authentication information instead is exchanged as part of the link control protocol (LCP), which is the first part of establishing a PPP link.
Section Chapter 16 provides information on the files you need to set up to establish a PPP link using PAP.