FIPS stands for Federal Information Processing Standards. FIPS defines how federal computers systems will be secured and how they will talk to each other. Windows XP and later can be configured for FIPS compliance. In my 6416C class in New York, this question came from a room full of government employees. They had an obvious interest in making sure what they had just learned on Network Policy Server could be considered for usage in their organizations. The two TechNet articles below outline how to do this and some considerations to follow.
Configure Wireless Clients running Windows 7 and Windows Vista for PEAP-MS-CHAP v2 Authentication