Michael,
   Yes you are correct, as soon as the Ipaq is in the USB craddle, it is
using the Desktop Passthru connection and should no longer be using the WLAN
connection.  The device cannot use both at the same time.  To get the device
to reconnect to the internet, either unplug the device and use the WLAN
connection, disconnect the laptop from the VPN so that the Desktop Passthru
points to the internet, or setup a proxy server on the Ipaq that links your
company network to the internet.

I hope this helps.

Thanks,

Carl Russell