Just kind of stumbled on this thread...the modem-to-modem connection is definitely possible. There are two things you need to fix to enable this:
First is line power -- all telephone lines provide a low amperage power to communicate/power phones/etc.
this page describes the "line simulator" that is required to make this work.
http://www.jagshouse.com/modem.html
Second part is the modems themselves. There are several lines between a modem and serial line that need to be possibly manipulated. An example I can think of is the following:
I had a laptop with a modem (running linux) that connected to the 56k modem on my dreamcast. There was a web browser disk that would allow you to dial up to a ISP and connect to it, and allow you to browse the web. The first part is the easiest --- the physical part. Hook em up together. Done.
The second part is telling the OS on the "server" side that whenever the modem answers, it needs to provide IP services (PPP). Typically, in windows, this is provided via DUN listening on a serial port.
Now, the last part is the oddest part and the one I dont 100% remember: Ordinarily, modems are connected via telephone switching stations, which take one active call, route it to where it needs to go, prefixing that "connection" with a telephone ring. The idea is to simulate that. You'd dial any number, setup PPP/DUN, and to connect the call, you'd connect the lines together. The modem would detect the carrier and the ringing noise on the line, put the modem off the hook (answering the call) and there ya go. You *may* have to configure the dialing end to "ignore dial tone before dialing" because there wont be a dial tone. But once the modem dials the number, it'll send out carriers and the "server" modem will be listening.