...

If I remember correctly, that service is part of tcp-small-servers (or maybe udp-smaller-servers) which most people have disabled due to the potential for exploitation in DOS attacks.

I think {tcp|udp}-small-servers is for configuring "small" services like echo,discard, and so on ...

Correct. They have no relevence to the IP timestamp option.

I've seen that for many routers IP timestamp option is enabled at least for flag = 1.

I don't know what the story is with cisco's implementation and the flag=3 stuff. I wouldn't be surprised if no one knew or it wasn't well-implemented. The IP timestamp option tends to be very very very very very rarely used on the Internet. cisco IOS has no configuration options to enable or disable IP timestamps (why would you want to?). Presumably you can do something with packet filters, though. --jhawk