PPTPd routing all traffic into VPN

Hi all, I've setup pptpd on Ubuntu 10.04 for the most part, it's able to connect, authenticate and ping the server itself, but is unable to ping any internet ips nor resolve domain names? any ideas

/etc/ppp/pptpd-options
========
name pptpd
refuse-pap
refuse-chap
refuse-mschap
require-mschap-v2
require-mppe-128
ms-dns 10.3.0.1
proxyarp
nodefaultroute
lock
nobsdcomp 
auth

/etc/pptpd.conf
=========
option    /etc/ppp/pptpd-optionslogwtmp
localip    10.3.0.1
remoteip    10.3.0.10-25

cat /proc/sys/net/ipv4/ip_forward
====================
1

/etc/rc.local
=======
iptables -A FORWARD -m state --state RELATED,ESTABLISHED -j ACCEPT
iptables -A FORWARD -s 10.8.0.0/24 -j ACCEPT
iptables -A FORWARD -j REJECT
iptables -t nat -A POSTROUTING -s 10.8.0.0/24 -o eth0 -j MASQUERADE
iptables -t nat -A POSTROUTING -s 10.3.0.0/24 -o eth0 -j MASQUERADE

and yes i have OpenVPN running fine on the same server too, not sue if its related.