Classic phone tools problem.
When you press the dial button you get this message.
"Com port is being used by another application.
Your call cannot be completed now."
But what application! What application is the COM port being used by.
What is the solution to making PhoneTools work?
Dogztar had a crack at some similar problems. As did moorhouselondon. Scroll down to the bottom of the pages to see the solutions. (Don't be put off by the "You need to be a premium member" message. Just scroll to the bottom of the page.)
In order to find out what is competing for the COM3 port, I uninstalled the Modem. In Windows XP when the machine is re-started, Windows automatically tries to re-install the Modem.
When windows tried to reinstall the modem, a COM port conflict message came up, alerting me that in my case it is ActiveSync attempting to connect via COM3 to my PDA which is causing the conflict.
This may not be the solution in all cases, but it was the source of the competition for the COM port in mine.
ActiveSync did not in any case need to access the PDA on the COM port, because it connects just fine using USB without it. With this option deselected, both PhoneTools and ActiveSync work correctly together on the PC.
Once I had deselected ActiveSync's attempts to connect on COM3 to my PDA, phone tools now works correctly again.