I had ICS (Internet Connection Sharing) for a while, I work on a client computer to a home network with 4 computers on it.
My reason for installing ICS was no free slots left in my desktop computer for an internal modem, but there are many free slots in other computers on the home network.
I installed a 56k PCI internal modem in one of the network computers.
It worked too well. Whenever a program wanted access to the web (surprisingly more and more of them do) the host computer automatically dialed out and connected. Just opening the Internet Explorer or Outlook Express was enough to trigger the dial-up networking on the host computer. My problem was not having a way to turn off the dial-up connection without going to the host computer and manually disconnecting from the ISP.
In answer to your question, is it possible to dial-up, and disconnect? My experience tells me that properly installed ICS automatically dials up, but does not give any status indicator and doesn't permit disconnecting.
Sorry if this post does little more than confirm your problem. Maybe Microsoft will expand the features of ICS in future versions of Windows?
My solution: uninstall ICS
I disabled the feature because it worked seemlessly and too well.