During setup, when configuring the interfaces, you have the option to set the red interface to PPPoE. Other options are static, dhcp etc. You can re-configure this by logging into your IPCop console and typing "setup" (without quotes). Then you choose "Networking", "Address settings". Select your red interface. You will see the choices for static, dhcp, pppoe and pptp. highlight pppoe and hit the spacebar to select. Then you hit ok.
If this is already set up and you only need to set up username and password, you need to log into the web admin. From the top menu, select "Network" and then, in the drop-down menu, select "Dialup". In the second box that is titled "Connection", you should see a dropdown type menu. Click on it and then select PPPoE. Hit save and when the page refreshes you will have the spaces to fill in your info. Most things can be left as default, but you may want to check the boxes for persistent connection and reconnect.
As for using the ipcop behind the router, you can do it, but you need to make sure that the red address is in a different subnet from your LAN. (i.e. you can't have 192.168.2.1 for red when you LAN subnet is 192.168.2.0/24) In this case, you would set the red interface to static. I suppose you could set it up for dhcp, but you don't really need to.
I think that you'll find that if you have IPCop set up for PPPoE, it is much easier to let IPCop handle it all without the router. (Remember, if you use the router inside your LAN, behind IPCop, don't use the WAN port on the router.)