I think that I've found an answer to your terminal problems. I have done the following to ensure that IrCOMM is working correctly. Here is how to make a Palmpilot run a vt100 session over IrDA:

1. Make sure irattach has been run: irattach /dev/ttyS2

2. Make sure you have the correct device /dev/ircomm0

3. Point your Palm at your empeg and run the program ptelenet. It is a terminal communications program you can get from here. The settings in ptelenet should under Serial be IR 19200 N 8 1 with RTS/CTS (hardware) flow control, and under Terminal make sure Serial is selected.

4. Run the following: getty -Ln -l /bin/bash ircomm0 19200 vt100. getty is a debian arm binary I've attached to this message. Alternately you could find it at ftp.debain.org

You will get a bash prompt on your Palm! You should be able to communicate with your other PC in much the same way as the Palmpilot does.