Your experience is very interesting. I have also noticed the pauses when I connected with putty from my win2k3 machine at home. Although obviously not as severe since I was able to connect just fine.

I'm pretty sure that there is some black magic going on as to the power management of the 770. It's just simply amazing to me that Nokia has been able to squeeze so much runtime out of this battery. Are you aware that the processor stops every few milliseconds when the backlight goes off as a power conservation method? Maybe the radio does something similar.

Anyway, it seems to me that your question may be better suited to the maemo-dev mailing list for a more accurate answer.