Supports TCP/IP and IPX tunnelling. With L2TP you are creating a layer 2 tunnel, so in theory any layer 3 protocol can be tunnelled. In most cases, however, TCP/IP will be used within the VPN tunnel. IPX is reported to work as well (not tested by me). The Microsoft clients support NetBEUI but pppd does not, so NetBEUI will probably not work.
Packet overhead. The payload traffic gets encapsulated a couple of times (IPsec, L2TP, PPP). This requires more bandwidth. It could also result in a problem with MTU size. If I'm not mistaken, 'plain' IPsec has an overhead of 56 bytes per packet. L2TP will add an extra 16 bytes per packet. If NAT-Traversal (IPsec encapsulated in UDP) is used the overhead will be even larger. I have not done any extensive performance evaluations. (Here is one report by a user). The 16 byte overhead is especially apparent if IP is the only protocol you want to tunnel, which is usually the case. 'Plain' IPsec does not have this extra L2TP/PPP overhead. Note that if you want to tunnel IPX over the Internet, you cannot avoid this overhead.