Hiya
I used to work tech support at an ISP here in Australia. In addition to the excellent advice that has been offered above, I’d like to add a few things:
Anything in between the line coming in to your house and your modem is a potential problem. I have seen some thoroughly weird stuff like: there’s an answering machine and a telephone and the modem daisy chained together. Remove the phone from the loop, and the problem goes away. Remove the answering machine from the loop and the problem comes back. So, what, the phone causes some kinda problem, and there is a problem with the bare line, but the answering machine “fixes” the problem? Dunno, but it worked with the phone out of the loop.
You “splitter” may cause problems, especially if it’s active (ie, battery or mains powered). If it’s literally just a Y-junction, it should not cause a problem, but taking it out of the line to experiment would be useful in gathering data.
Secondly, some phones (the standard issue from here from the teleco) draw current from the line at irregular intervals to recharge their small internal batteries (that are used to store the memory phone numbers). This can cause a dropout.
Thirdly, renegotiating. You don’t say what speed you are connecting at, but anything faster than 33.6k is asking for trouble, really, unless you are plain lucky (line age and exchange distance seems to be the main thing here). In the handshake process (the noisy bit you hear when you connect), the modem at your end, and the ISP’s end negotiate a speed they can communicate at. It goes something like this:
hi, I am user <name>, can I come in?
sure, what's you password?
er, <password>?
excellent, thanks, let's try 14k4...
fine for me, let's try 26k5...
hmm, good, what about 33k6?
yes, what about 42k5?
excellent, what how's about 52k6?
woah, little shaky, maybe 42k5 is safer?
yes, lets agree on 42k5
ok, thanks, seeya
[connection established]
Obviously pretty basic, and omits a lot of other stuff, but the point is, they start a set speed (depends on your modem init strings and the ISP’s modems), and crank it up til they hit errors, back it off a click, and call that it - for now.
Later on in the session, the client or the server might detect the line quality degrading (or improving) for whatever reason, stop the normal data transfer, and renegotiate up or down. Sometimes they are FAR to aggressive in this process, and decide that just cos they can get a 56k connection for two seconds that it’ll be fine for the next few hours. Of course, that kinda speed cannot last (too many errors), so the modems give up and disconnect.
Luckily, there are a few things you can do about this. The best thing is to upgrade your modem’s firmware. If it’s a cheapie internal (under $50US), it’s prolly a WinModem, which is basically a software modem - no processing power on the card, it relies pretty much entirely on the firmware (software stored on a chip on the modem), and the main CPU on your machine. That’s not bad, in a way, cos they are damn cheap, and most machines these days have processing power to burn… but it can mean that you have to frig around with firmware updates alla time.
There is an excellent site that has a lot of info and firmware links to most manufacturers (most WinModems are based on one of three main chipsets, and re-branded under dozens of names), and has troubleshooting info galore. Like so many sites that have a lot of useful content, it’s design is appalling, but it’s THE best reference for this kinda info:
http://808hi.com/
If you don’t have a WinModem, that site is still useful. Updating your drivers (usually available from your manufacturer’s website) never hurts. Bleeding edge new drivers with special features are best avoided. Check their docs, there might be a driver one notch down that has some bugs but works pretty well.
Keep in mind that if you spent a little more on a modem, you don’t have it spend this time messing about it with it all. Brand name external modems are pretty good, you tend to get what you pay for. USB modems are very stable these days, as well (some are cheapie WinModems, tho, so beware).
Another thing to ask your ISp about is alternate dialup numbers. Modems at the ISP end come in big boxes of 20, 40, 60 or more (PortMaster brand come to mind). These are a godsend for ISP’s (they used to have to have hundreds of external modems on shelves!), but there are some problems - cheap WinModems don’t work so well with them.
Some more responsible ISP’s have several dialup numbers that go to different hardware on their end. You might find that your modem works better with different ISP hardware. Ask tech support. If the drone on the other end of the phone knows little, as to speak to a supervisor.
Another thing worth trying is borrowing a friends access info for a different ISP, and see if you have the same problem. This will not tell you much if you don’t know what hardware the ISP is using on the other end, tho, and you did say you used to be with AOL, and had the same trouble.
The converse of this, is trying YOUR account on someone else’s machine, preferably in a different neighborhood, to get more valid data. Setting up a dial up connection on someone else’s machine is an easy process, takes under five minutes, and will give you some very useful data. If you try this, you’ll need the dialup number, your username and password, and maybe the ISP’s DNS settings (unlikely, these days, most are auto). Go to My Computer, Dial Up Networking, right click on the entry you are using, and click on all the tabs, and jot down the info. Don’t forget the stuff under the “advanced” buttons.
Yet another thing to try is to borrow a friends’ (preferably external, serial) modem, and try it, see what you get. There is no problem having multiple modems connected in Win9x (which I presume you are using?) - Control Panel, modems Add modem. WinXP and Me come with a stack of drivers (and the default ones usually work fine), but it never hurts to get the driver disk that came with the modem and install that as well, just to be sure.
Lastly, and I hate to bring this up, cos I am a chronic DIY’er myself, your own work at home with the line extension. Small things like incorrect cable specs (smaller or large sq mm cable would affect resistance, and could affect data transfer, unlikely but possible), incorrect or sloppy termination of wires into connectors could result in intermittent results. No offence, but it’s a possibility.
All in all, I’d say it’s most likely a combo of too-aggressive re-negotiations in line speed and substandard line quality in your area. Firmware updates can make all the difference, so I’d make this your first port of call.
Whew, I thought I had forgotten all this! Been a few years. I ran it by a guy in the biz still and he says it’s all accurate, so I hope it helps. Let me know if you have any specific queries.
Oh, and I am happy to be corrected about any factual errors I may have made. 
abby
