35 USC 101 - whoever invents a new and useful process, machine, manufacture, composition of matter, or any new and useful improvement thereof, may obtain a patent therefor. So, the question isn't "does that Lodsys patent include PPP references or discuss physical modem components", but "is it claiming an improvement on existing PPP modem technology?"
Ah, that makes a lot of sense. Basically, patents only need to be an improvement over a process.
Concerning the car engine patent - the summary does give information on the benefits of the patent (even if they are not binding). In particular, there's fuel efficiency savings, or provides improvements to the design, etc. As such, I have no objection to that patent.
But the patent I referenced - I have significant difficulty tracking down what's novel. A quick glance over the claims, and summary - I haven't found anything that would be inventive in ~1996. I'd perhaps even say ~1994, considering that Winsock Trumpet provided Internet connectivity even earlier.
As for their demand letter... they say that 802.11 is a violation of the patent, being a bidirectional communication path, and information is sent to the modem. This is incorrect - 802.11 wireless is actually omnidirectional, due to the ease of listening in to the conversaion (e.g. FireSheep, Aircrack-ng). Further, their patent is more specific to physical connections rather than wireless.