VPN from Windows XP to OpenSwan: correct setup?

Main question is what I am doing wrong in my OpenSwan or L2TP client setup?

I am trying to create a Linux OpenSwan VPN connection from Windows XP machine, using preshared key and the builtin Windows XP L2TP IPsec option.

I have followed the instructions in Linux Home networking Wiki for setting up OpenSwan and a guide to making it work with the Windows XP client, but am now stuck.

The net setup is as follows:

[my windows client, private IP A]<->[f/wall B]<-internet->[g/w X]<->[Linux OpenSwan server Y]
A - private subnet /24
B - internet address
X - internet address /24
Y - internet address on same subnet as X

What I essentially want is for computer with A address to feel and work, as if it was in X subnet for purposes of outgoing and incoming TCP and UDP connections.

My OpenSwan setup is as follows:

/etc/ipsec.conf (AAA and YYY indicates ip address parts of A and Y addresses):

conn net-to-net
        authby=secret
        left=B
        leftsubnet=AAA.AAA.AAA.0/24
        leftnexthop=%defaultroute
        right=Y
        rightsubnet=YYY.YYY.YYY.0/24
        rightnexthop=B
        auto=start

the secret in /etc/ipsec.secrets is listed as:

B Y : PSK "0xMysecretkey"

where B & Y stand for respective IP adresses of gateway B and linux server Y

My L2TP WinXP setup is:

• IP of destination: Y
• don't prompt for username
• security options: typical, require secured pass, don't require data encryption, IPSec PSK set to 0xMysecretkey
• networking options: VPN Type: L2TP IPSec VPN; TCPIP protocol (with automatic IP address assignment) and QOS packet schedulers enabled

The error I get from Windows client is 789: "error during initial negotiation"