Speaking as the author of "LCP Extensions", there is no such LCP extension as "dynamically-assigned DNS servers".
There is a bogus, NDA'd, Mircosoft-only, NetBEUI extension to PPP IPCP, using numbers stolen from the high end of the option space without registering with IANA, which is marginally applicable to DNS.
This approach has been officially rejected by the IETF. It is not a "best current practice". It only works with NT servers, which no sane and stable ISP would use.
The sad fact is that this what what most people use. It may as well be a standard, since it works. I hate M$ as much as the next clueful person, but you need to know your enemy before making statements like this. The assignments of DNS during PPP IPCP is not restricted to NT, but works on the other M$ OSes and also a large number of non WinCE PDAs too. No matter how technically inelegant, the solution is one that works, uses minimum overhead and can be driven from that simple configuration engine, "RADIUS". You may also now argue that RADIUS is an user authentication database, but it is being used, again, in the real world, as a configuration database, and users just happen to be one of those items being configured. Peter