The Linux 2.4.9-ac10-rmk2-np1-ads3 and earlier zImages and ramdisks provided by ADS do not include support for PPP. To get this capability, you will have to build a kernel with PPP drivers enabled and modify your ramdisk to support PPP.
If you haven't already built a source tree start with Building a linux kernel for your board.
Here's how to enable PPP:
Issued the command
make menuconfig
Under Network device support, turn on PPP support and PPP support for async serial ports and then rebuild your zImage
make dep zImage
Note: On a Bitsy, if you're planning to use a modem on /dev/ttySA1, you'll have to turn off the LEDs. They share a line with /dev/ttySA1's DTR. In linux/arch/arm/mach-sa1100/leds-adsbitsy.c, change LED_STATE_ENABLED to 0. Then rebuild your zImage.
make zImage
Now you need chat and pppd. You can download pppd, chat, and related script files here. They have been tested with the 2.4.9-ac10-rmk2-np1-ads3 kernel.
For do-it-yourself types, the source code can be downloaded here. To cross compile chat and pppd, change CC to arm-linux-gcc in the Makefiles. (You'll also want to change BINDIR and MANDIR so the cross compiled pppd will not be installed on your development system.)
Now mount your ramdisk
gunzip ramdisk.gz
mkdir /mnt/loop
mount -o loop ramdisk /mnt/loop
Copy pppd and chat to /mnt/loop/usr/sbin/ and issue these commands
mknod /mnt/loop/dev/ppp c 108 0
chmod 600 /mnt/loop/dev/ppp
Copy the ppp scripts to /mnt/loop/etc/ppp/ and edit them to work for your situation (see the README file).
Edit /etc/inittab to not start a getty on the dev you want to use (e.g. /dev/ttySA1).
Unmount the ramdisk
umount /mnt/loop
gzip ramdisk
and copy it and your new zImage to your board.