PPP wouldn't be necessary: you can just tar over the pipe.

At the PC end:

cat /dev/usbthing >file.tar
(I've not used the 2.3 linux drivers, I don't know what the device name is)

On the empeg end:

tar cf /dev/usb0 /empeg/drive0

...should do it. Obviously, when it's finished you'll need to stop the cat at the PC end and tar tvf the file to check that it all got there ok.

Hugo