On bootup, iijppp is started in -auto mode to initiate ppp connection over
tun0 device, default route to 198.168.61.61 is established by iijppp

Routed is started in -q mode.  A netware fileserver is broadcasting RIP for 
198.168.37.0 recahable through 198.168.36.99 and
198.168.38.0 recahable through 198.168.36.99. 

When I attempt to traceroute to 198.168.54.8 (ns.rezonet.net) a host 
outside our domain.  One of two things will happend:

1. If routed -q is running, I get this result:
   55 [vhf:/home/andreww] : traceroute 198.168.54.8
   traceroute to 198.168.54.8 (198.168.54.8), 30 hops max, 40 byte packets
    1  fs (198.168.36.99)  2.483 ms !H  1.111 ms !H  0.964 ms !H

   Netstat -rna produces (other stuff removed):
default          198.168.61.61      UGc        20        3      tun0  

2. If routed is NOT running, I get this result:
   52 [vhf:/home/andreww] : traceroute ns.rezonet.net
   traceroute to ns.rezonet.net (198.168.54.8), 30 hops max, 40 byte packets
    1  S496.InterLink.NET (198.168.61.61)  226.432 ms  191.383 ms  198.247 ms
    2  MIX.NET (198.168.73.2)  197.366 ms  205.749 ms  168.272 ms
    3  ns.RezoNet.NET (198.168.54.8)  197.555 ms  205.701 ms  198.371 ms   

   Netstat -rna produces (other stuff removed):
198.168.54.8     198.168.61.61      UGHW        2       69      tun0  

I've put a protocol tracer on both the ppp link and our internal 
networks and there are no RIP packets with any information that could 
cause this erratic behaviour.  Fileserver and ppp link are clean.  
Fileserver's RIP packets are okay.

Fix: 

Don't run routed -q, use static routes.
Routing information corrupted by routed?
How-To-Repeat: 
As long as routed -q is run on bootup this happends.