Update, no good news...
The dialups I'm connecting through are Ascend MaxHPs, and I inserted username and password directly into their config. (normally the Ascends defer to the radius server, but I bypass that and let the Ascends handle authenticating this specific user/pass combo directly) It still fails. If I manually edit the radius users file, or the Ascend config, and force the password to be double-quoted ( = '"password"' to achieve that) it will connect correctly. But ONLY if I set the respective passwords to password on the Zaurus, but "password" on the server or ascend...
The problem seems to me to be clearly at 'my' end, with the Z. I don't know if it's ppp itself, or something specific to the pdaXrom build of it - googling doesn't find any bugreports on ppp about the issue, or any mailinglist threads discussing it, making me suspicious that it's limited to the pdaXrom build...
j