FUcntions erratically, first connection to prxied-ip works nicely. Second 
and subsequent connections fail to transmit anything.

As i understand this it seems to be because when the first pppd is 
terminated it deletes the arp entry and route to it, there is 
often some packets still going to the the said ip as the pppd machine 
sees it sees that the ip is on the same network as it it tries to send it 
to ethernet and generates bogus route and missing arp entry for the ip, 
now the seconed pppd fails to create arp entry or route for the ip.

Is the above true or am I missing something ?

I think that the way to fix this would be to change pppd to remove
routes and arp info before trying to write over them, of course it would
have to check that the route is not a valid one.

Way to kludge around this is to drop proxyarp from pppd commandline and 
add permanent published arp entry for the ppp-ip (worked at least once).

-- 
 Jarkko.Torppa@cute.fi     +358-0-648090          Cute Communications Oy