I saw in the logs you successfully connected and exchanged packets.
There are several troubleshooting steps on the abridge page:
http://synack.net/~bbraun/abridge.html
It'll just show up in the chooser under appletalk, assuming you've selected ethertalk as your appletalk device.
This software should not affect local traffic. In theory with such a connection the PBG3 and 5300c should have been able to see an iBookG3 on my side of the connection. However, it sounds as if there is a local networking issue if the two are directly connected and are having problems. I have also not tested with the localtalk to ethertalk bridges.
There are several troubleshooting steps on the abridge page:
http://synack.net/~bbraun/abridge.html